Lenders are constantly reviewing important pieces of data, typically from multiple vendor sources, in order to make critical lending decisions regarding borrowers or their pieces of property. This often results in miscommunication, lost files and the use of inappropriate vendors for unique scenarios.
Luckily, there have been major advancements in the world of reporting, including the perfection of software tools that allow third-party companies to collect vendor data and display it in ways that are easy for employees to consume. Those employees are then better able to effectively guide their lender customers to the best course of action regarding the vendors they use.
For instance, one of the biggest complaints that borrowers often have with their lender is that the appraisal process takes far too long. Especially in today’s world of instant gratification, no one is happy about waiting weeks to hear if their loan has been approved.
So, if an appraisal from a certain vendor took an unusually long amount of time, a third-party employee can use this reporting software to determine if this is a one-off scenario that occurred due to unexpected factors, or if it is actually part of a larger trend with that particular vendor. If the vendor is performing positively the majority of the time, no changes need to be made. However, if the data indicates a larger trend of poor performance, the employee must then alert the lender and help him make an appropriate decision about using better vendors in the future.
Because of this, it is important for third-party companies to first focus on internal reporting so that they can ensure they are doing the best possible job for their lender customers. When evaluating these reports, employees may note things like a vendor consistently slacking on turn times or a lender that is lending in an increasingly wide footprint. Upon seeing things like this, the company can provide its guidance on what alternative vendor options they may have.
And, just because a vendor is flagged for one customer does not mean it is flagged for all customers. Not all vendors are great performers in all areas; one may be a top performer in California but fail miserably on the East Coast. It is up to the third-party company to ensure that each of its customers’ unique requirements are met at all times.
Of course, a reporting solution from a third-party provider is of no use if the provider is not adamant about staying up to date on compliance expectations. As lenders know better than anyone, the home equity and refinance industry is no stranger to ever-changing rules and requirements. By partnering with a company that can easily update its software as soon as laws or industry standards change, lenders save a lot of time and greatly reduce the risk of costly mistakes.
Reporting and analyzing data is truly the best method of vendor management. If a third-party provider has a lender customer that wants to change vendors, that provider should be able to effectively and efficiently collect data on the vendor and present it to the lender to either enforce or dispute their concern. It is vital to avoid making a vendor change based on an isolated incident that could actually make the problem worse.
An all-in-one solution to consolidate settlement services and aggregate vendor management, as opposed to the traditional model of ordering title, valuation and flood reports from different vendors, is critical for lenders to be flexible, successful, and to maintain positive relationships with their borrowers.
About The Author
Christina Hardin is a systems analyst at Austin, Texas-based FirstClose, provider of end-to-end technology solutions to mortgage lenders nationwide. The FirstClose reporting suite is the first, comprehensive solution with capabilities to deliver title, flood, valuation and other important data elements in one report. For more information, visit www.firstclose.com.