*Think Creatively, Get Results*
**By Sharon Matthews**
***With exterior pressures, such as increasing regulation and compliance demands that force the need for additional transparency, combined with MBA predictions of dramatic origination declines in the third and fourth quarters and perhaps beyond, lenders must actively seek out new ways of doing business.
****Although our industry continues to go through a rough patch, at eLynx we have found that focusing on the data and adoption of the end-to-end electronic loan process in creative ways, can lead lending organization along a path of growth and prosperity.
****As lenders, I’m sure what matters to you, is how this thinking will pay off financially and with attracting and retaining the best borrowers. I would argue that as you work to continuously improve loan quality through a more data-driven workflow, you can see results today and tomorrow, that are both tangible and intangible.
****A New Focus
****The need for quality data is an insistent demand throughout the mortgage lending process. A competitive advantage is available to lenders who can access, track and validate that data from the various parties throughout the loan cycle. Those lenders who have the technology to know where the loan is in the lending workflow, and when the loan is passed from one party to the next and to affirm that the specific borrower, property, and loan details remained consistent throughout the cycle, will have an even greater advantage.
****Different parties in the lending process are at different stages of embracing electronic documents, signatures and trusted data: some organizations have automated parts of the process but are still scanning some paper documents, and faxing others. Others are still evaluating application of the various technologies. It runs the gamut. Traditional solutions to this dilemma require establishment and ongoing management of multiple point to point connections with partners. This makes the requirement of trusted loan data difficult, expensive and time consuming for lenders
****At eLynx we believe that the simplest and most cost effective way to solve this problem, is to bring the loan participants together across a technologically rich, standards based network, that facilitates the secure sharing of legitimate information between partners, to improve loan quality while minimizing the cost associated with achieving it .
****Hence we developed the eLynx Expediteplatform, which acts as an electronic document and data delivery system between enterprises and their customers and partners. It fully supports a suite of configurable applications including electronic delivery, signatures, folders, fax, and print-and-mail fulfillment services. The applications are supported with data capture, tracking and analysis tools that can be used to improve loan quality and minimize fraud throughout the mortgage loan
****The end goal of our approach of course is to use a flexible approach to facilitate lenders’ ability to focus on the phases of the loan cycle in a sequence that best suits them, and at a rate that suits them. Lenders and their partners can start simply and then build as their needs evolve. For example, start with electronic disclosures, backed up by print and mail fulfillment and progress from there. This will immediately improve response to the current compliance questions.
****Adoption & Connectivity
****In order to comply with the new RESPA rules, lenders are turning to various electronic delivery solutions – but there are significant additional benefits of adoption of such solutions.
****It is measurable, that borrowers who accept upfront disclosures electronically are statistically more likely to stay with the same lender through to loan closing, helping lenders remove paper, time, and expense from origination and refinancing and to improve their application-to-closing ratio. (According to an eLynx study of loan closing data, three times as many borrowers who sign disclosures electronically make it all the way to the closing table). This not only makes it easier to comply with the new RESPA rules, but it results in faster closings and a higher pull-through rate of quality borrowers, all good news.
****The Compliance Opportunity
****With the onslaught of new regulations in the industry, lenders have an opportunity to apply creativity and new business tools to loan workflows.
****To assure compliant charges on the GFE and HUD, work that has traditionally been done via phone and e-mail can now be done interactively within eLynx’s eHUD product which is part of the electronic closing network (eCN) that lenders and closing agents are already using to close loans today. A built-in audit trail and an innovative handshake mechanism make it easy to see how a negotiation is progressing, providing an at-a-glance transparency into the fees and status of HUD-1 preparation.
****The lender and the settlement agent can collaborate in the eHUD work space to compare the lender’s charges with the settlement agent’s charges, side by side, and automatically point out and resolve any discrepancies, prior to closing, avoiding costs or delays.
****To enhance the accuracy and the quality loan data delivered to the government-sponsored entities (GSEs), Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency (FHFA), have developed the Uniform Appraisal Dataset (UAD) and the loan delivery data standards, Uniform Loan Delivery Dataset (ULDD), that will be required for all mortgages sold to either GSE.
****The UAD and ULDD are components of the Uniform Mortgage Data Program (UMDP), which provide common requirements for appraisal and loan delivery data. We can meet the requirements of this new program with the Expediteplatform and will accept loan data from lenders and produce compliant XML files which can be electronically send to the GSEs during loan delivery.
****As part of our standards based approach SMART Docs have practical application today. Because of this, our Expediteplatform supports Category 3 SMART Docs with electronic signatures, a requirement for Fannie Mae loan modifications under the HAMP program. By using an electronic channel to sign and distribute documents there is a significant reduction in the time required to process HAMP applications, causing data to hit the decision cycle much more quickly.
****The ability to detect and stop fraud depends on the quality of the data, and the timeliness of its availability. In addition, there’s a lot of concern about fraud at the closing table. Who really is the settlement agent closing the loan. Are they a valid player in the process? Lenders who fully participate in the eLynx’s network have access to eLynx’s Settlement Agent tools, analysis and data and can safely assure and validate closing agents on a regular basis to ensure that a bad actor cannot access a loan and the associated closing funds inappropriately.
****Creativity and ROI
****The future of the mortgage industry is paved with opportunities to improve loan quality and reduce cost though adoption of electronic solutions and that effectively manage integrated data throughout. But, lenders need partners who can work with them to apply creative thinking to the technologies and the way they will be implemented, to successfully deploy and adopt at lowest cost. Doing so together, means lenders can chart a path that results in the highest available ROI for their businesses. Proactive vendors have already paved that path and those lenders that dare to travel down that path won’t just be survivors, they’ll be big winners. And let’s face it, we all want to win.
****ABOUT THE AUTHOR: As President and CEO, Sharon Matthews oversees the overall operations of the company and is responsible for the growth of eLynx’s market leadership position providing data-driven document distribution, collaboration, and connectivity services for the financial services, mortgage banking, and real estate industries. Matthews came to eLynx with more than 25 years of senior executive experience running profitable large technology and software companies. Under her four-year leadership at Solectron, an electronic manufacturing services business, she re-engineered the multiple sales organizations into a single cohesive whole and then applied those principles to successfully run a profitable $1.7 billion business unit of large corporate accounts in the Computer Sector. Prior to her role in Solectron, Matthews was the CEO of UCMS, a global customer relationship management outsourcing business with operations in the U.S. and Australia.