*Don’t Be Led Astray, Make The Best Technology Decisions*
**By Adam Calvery**
***There are so many new mortgage regulations coming and so many that are already in place, it’s near impossible for a lender to make wise technology decisions and investments with all the “a rule shall be made” resolutions circling like vultures.
****You won’t be able to foresee every compliance issue coming your way, but that’s why it’s more important than ever that you choose the right technology company. Choose a technology vendor that knows what’s going on in the mortgage world, has experience in multiple sectors, and has the foresight and the flexibility to adapt quickly to compliance regulations without impacting your pipelines.
****Here’s an example. The government through both GSEs has conceived the Uniform Mortgage Data Program (UMDP). This initiative requires that appraisals be transferred as XML data directly to the lender and ultimately the investor. Deadlines are still being decided, but it’s coming soon and it will be mandatory if you intend to sell your loans.
****How are you managing appraisals and appraisal data now? You’ve probably made changes since HVCC, but does your appraisal management provide real data that’s UMDP-ready? Ask them, and force them to get specific.
****If your appraisal management solution is giving you the data from a scanned or OCR’d PDF of an appraisal report – beware. This new mandate is not about error-prone OCR tactics that try to scrape data from a piece of paper or a PDF, it’s about getting at the actual data. Don’t learn this the hard way when Fannie or Freddie kick back your loans and you’re left holding the bag. Here’s another example. If you have appraisals ordered or received using regular unencrypted email, or fax machines in an unsecure area, you’re violating GLB since those contain consumer data that GLB mandates as protected. If sales contracts are attached to appraisal orders and reports, then it’s even worse. And storing printouts of those documents in cardboard boxes or unlocked file cabinets is strictly forbidden. Nevertheless, every day, many lenders are subjected to every one of those risks. A consumer privacy breach can be exceptionally expensive, and everyone in the transaction can get mired in the ensuing legal liability mess. With consumers more militant and better armed than ever, most lenders are one non-shredded trash bin or accidentally forwarded e-mail away from a privacy lawsuit.
****For the past 25 years, we’ve been a leader in mortgage technology. Privately held and with zero debt, we’ve bootstrapped our way into this position through old fashioned hard work and expertise. Today, over half of the nation’s residential real estate transactions pass through our Network Operations Center and we’ve been in the thick of every compliance issue over the past 25 years. We’ve got the infrastructure and experience to roll with whatever the regulators throw our way.
****As we start off this new column here at PROGRESS in Lending, we at a la mode hope to give you some things to think about and some critical insights to arm you to make the best technology decisions possible. Stay tuned.