This week, Executive Spotlight returns, with the focus on Shannon Cobb, executive vice president at American Tax & Property Reporting Inc. (ATPR), a provider of technology focused solutions for the real estate and settlement services industry.
Q: It used to be true that a firm outsourcing its data reporting took a big risk in terms of quality, while opting for a better price. How has the use of outsourced searches or data reporting changed?
Shannon Cobb: You are absolutely right. Not very long ago, a firm ordering a simple title search from a data reporting company knew that it was quite possibly trading quality for speed and reduced cost. That has changed dramatically. A business providing a line of data products that have an effect on the mortgage transaction would be committing financial suicide to overlook the rising importance on quality and compliance.
Mortgage lenders are already seeing increased costs across the board. Lenders now are unwilling to take the risk of incorporating bad data or information into the process—at the possible cost of future business or even the scrutiny of an enforcement agency. Their investors (and regulators) expect that any kind of data reporting, title or otherwise, will be done accurately and thoroughly, not just quickly and at efficient pricing.
Q: The CFPB has told us that mortgage lenders will be held accountable for the actions of their “service providers.” How has the way in which your lending clients deal with their partners changed, and is it for the better?
Shannon Cobb: In our experience, mortgage lenders are putting an exponentially greater effort into understanding and monitoring the processes and products of their vendors. Their partners are expected to demonstrate how they operate; provide metrics as to their performance and be available for audit or site visit whenever the lender wishes.
A lender cannot afford to be any less careful. I believe this is a good thing. There was a time when some lenders had virtually no involvement in the title and settlement process. Their increased involvement can only lead to more efficiency and improved quality in the long run.
Q: How do you think the TILA-RESPA Integrated Disclosures rule (TRID) will affect our industry in the long run?
Shannon Cobb: After the initial uncertainty fades, I actually believe TRID will force our industry to do some things it has needed to do (but hasn’t) for quite some time. As a practical matter, some of the requirements of TRID will force the mortgage lender to be in fairly consistent contact with its settlement partners.
There will no longer be a clear “handoff.” Lenders and their title or settlement partners will be forced to improve their communication as well as their ability to work on a document simultaneously. Some processes will be affected.
Sometimes, I fear that our industry operates a bit too much in the silo from segment to segment. Often, this only adds to cost and impedes speed and efficiency. Although TRID will probably be challenging early on, as we adapt to it and grow accustomed to it, we may well find that it actually helps our industry in the long run, as well as the consumer.
Q: How does ATPR’s SmartProp (ATPR’s uninsured property search product) penetrate a title search report market that is already fairly crowded?
Shannon Cobb: Certainly, title and mortgage companies have a number of choices when it comes to processing property reports. However, ATPR is emphasizing the importance of the people behind the reporting.
We have one of the largest networks of abstractors in the nation backing our product. And we go to great lengths to train our support staff not only for their own responsibilities, but with a greater understanding of the entire mortgage process that we play a role in.
The mortgage industry, as we so often hear, is indeed a relationship-based business. So we are betting on the quality of our people combined with superior technology to really establish our presence. These efforts have helped us build immense trust with the lenders, title agents and attorneys that we are now servicing.
Phil Hall has been (among other things) a United Nations-based radio journalist, the president of a public relations and marketing agency, a financial magazine editor, the author of six books and a horror movie actor. Also, as you will discover, he is not shy about stating his views.