By Tony Garritano
What’s going on in the mortgage market? What trends should you be aware of? Tony tells you in this daily column.

Market Analysis: A Dynamic Approach To Compliance

*A Dynamic Approach To Compliance*
**By Tony Garritano**

***Everyone is worried about compliance these days. But of course, I’m going to tell you that technology can help, and it is a true statement. For example, Motivity Solutions, creators of the business management platform called Movation, has formulated a new approach to tackling compliance. The pace of new regulation has been feverish to the point when it is almost unbearable for mortgage lenders. In response, Motivity Solutions has adopted a performance-driven approach that helps lenders remain ahead of any new regulation. Here’s the scoop:

****Lenders that develop performance driven operations in an uncertain lending environment can realize the advantages that streamlined mortgage operations can deliver in terms of measurable business benefits and the impact it can have on their overall go forward strategies. Specifically, business intelligence (BI) technology can help lenders handle a host of compliance issues all within one system.

****As lenders look to cut costs and be more efficient, BI technology delivered by Motivity Solutions through its Movation platform can ensure that individual activities are automatically assigned to employees based on their role and your company processes. Every employee has a workspace that displays the task they are working on and which tasks need to be completed – automatically and in real-time.

****Managers can view the workload of their entire team and can easily assign work and load balance as necessary. Features like those described are important because lenders need to know where they stand relative to new regulation for a variety of reasons. For example, earlier in the year the mortgage industry was hit with new loan officer rules that stipulate that loan officer compensation cannot be based on a mortgage transaction’s terms. In order to avoid a stiff penalty and the label of being predatory, lenders can use Movation to track all elements of the loan and LO compensation.

****Also this year the mortgage industry saw changes made to the good-faith estimate (GFE). Changes on the new GFE deal with binding fees, changes in how the origination fees/discount points are determined, how these are disclosed and what can and cannot be changed. Lenders will find it difficult to comply if they do not have a complete understanding of every element of the loan. Movation provides the ability to “manage by exception” and drill down to the underlying loan-level detail from multiple data sources.

****However, if the technology is not accessible, it will not get usage. For this very reason Movation makes BI extremely user friendly and visual. To this end, Movation provides scorecards to enable the lender to be even more compliant and performance driven in a very complex mortgage environment. Movation Scorecards incorporate a variety of Key Performance Indicators (KPIs) which are defined metrics used to align small-scale operational activities with large-scale company goals. These KPIs are combined into a Scorecard which constantly monitors performance allowing you to compare and analyze goals versus actual results. Movation takes this a step further by proactively alerting key users when a pre-defined event occurs or when a threshold is reached.

****But scorecards are just one way to make BI actionable. The technology also incorporates dashboards. Through the dashboards users graphically see high-level summary data and have the ability to drill down to refined levels of data to instantly identify and solve the root cause of a problem. Movation’s Dashboards are role-based and customizable to ensure employees only have access to relevant, job-specific data.

****Together this technology can make it possible for lenders to get a handle on their operation and not only react to new rules and regulations, but to also get ahead of any new regulations that may come down in the future.

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Market Analysis: Let’s Take On The CFPB

*Let’s Take On The CFPB*
**By Tony Garritano**

***The “Know Before You Owe” initiative at the Consumer Finance Protection Bureau began in May of this year when the new watchdog agency asked the public to compare two different draft designs of a new streamlined mortgage disclosure. In the months that followed, the CFPB used that input to help it improve initial draft designs. Altogether, the CFPB received more than 22,000 comments on how to improve mortgage disclosures. When revised disclosures are released it will represent yet one more hurdle for lenders already struggling to keep up with compliance requirements that continue to become more complex.  In response to an ever-changing mortgage market, PROGRESS in Lending has learned that document compliance provider MRG has embraced a data-centric approach to document creation that will help lenders comply with this and any other document compliance issue that may arise in the future. Here’s the scoop:

****Lending has significantly changed over the past couple of years.  The pressure on today’s lenders is enormous.  This lending environment creates dramatic loan document challenges and risks for lenders.  Changing rules, regulations, and the ramifications of non-compliance, including fees, penalties and the possibility of buy-backs make the origination process an escalating challenge.  Traditional “doc prep” is no longer the answer when lenders are trying to handle these complex and ever changing requirements.

****Most lenders, quite frankly, don’t have the time or resources to staff a compliance department that can constantly monitor and accurately interpret the vast number of regulatory changes that are being implemented on a federal, state and local level.  Unfortunately, the same is true for many traditional “doc prep” providers.  Those providers that rely on an antiquated forms library to deliver static documents, with limited legal compliance analysts, are no longer a prudent choice.  Relying on outdated, traditional “doc prep” is a risk that lenders simply cannot afford to take in an increasingly “compliance-centric” environment.

****To this end, MRG Document Technologies (MRG) delivers complete, real time mortgage compliance directly into the document process – no static document templates for the lender to choose and manage internally. MRG attorneys constantly monitor the ever changing regulatory landscape and provide dynamic document compliance. MRG does not license any third party content or calculations, which allows MRG to fully rep, warrant, guaranty, and defend, its product. The product is backed by an E/O policy from full disclosure through closing packages, including calculations.  No more need for an internal compliance staff to manually manage package content or selection, for fear of inaccuracy.

****All document and calculation updates are compliantly and automatically delivered in real time. Together with the lender’s chosen LOS for a seamless, “lights out” approach, disclosure packages are drawn within 30 seconds and closing packages in just a couple minutes. Throughout the package request process, loans are checked with industry leading automated loan compliance tests, thus eliminating the need for additional 3rd party vendor software. In addition, MRG attorneys are available for services regarding general compliance advice, which is built into the overall compliant document solution.

****These comprehensive document compliance solutions provide lenders with the ability to enhance their compliance initiatives. It also gives lenders the tools they need to increase loan production, speed up turnaround times, while significantly mitigating risk. By providing a staff of mortgage banking attorneys to lenders, MRG also delivers the support and regulatory monitoring required to ensure loans are meeting the latest regulatory demands.

****Lending has changed forever. So too must the lenders document preparation solution.  No longer can lenders rely on antiquated form libraries and technology from traditional “doc prep” providers that have limited legal expertise and experience.  The risk and exposure is far too great.

****In today’s regulatory environment, lenders must demand more from their “doc prep” provider – compliance and dynamic content technology.

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Market Analysis: It’s Time To ENGAGE

*It’s Time To ENGAGE*
**By Tony Garritano**

***After much planning, ENGAGE 2011 was a big success. PROGRESS in Lending Association held ENGAGE 2011 on October 9 to provide a forum for industry participants to share ideas. And sharing ideas is exactly what happened. Opinions of all shapes and sizes flew about. It was a real lively exchange. And after all, that’s why we started ENGAGE 2011. Here are some highlights:

****We heard breaking news from Larry Huff at Optimal Blue as he discussed why his company acquired Sollen. Industry consolidation is certainly a product of a very tense market.  In addition, new partnerships were announced. a la mode announced that Xerox Mortgage Services will use Mercury Network’s DataCourier service  to add a new appraisal management service to the BlitzDocs® intelligent collaborative network.  Xerox Mortgage Services’ clients will now be able to receive and store appraisals in the BlitzDocs electronic loan folder™ (eFolder), submit appraisals to the GSEs in compliance with the Uniform Appraisal Dataset (UAD), and also send the appraisal and all related documents to investors.

****Mercury Network will allow BlitzDocs users to manage the newly required “UAD” MISMO 2.6 Errata 1 GSE Extended format  appraisals inside their eFolder, and receive Native XML directly from the largest panel of appraisers in the country.  The Native XML eliminates the need for error-prone PDF conversion and the fees and possible delays associated with sending PDFs to the GSEs.  In addition, Mercury Network runs an extensive set of quality control and compliance rules on the appraisal so users can correct any compliance issues before submitting it to the GSEs’ Uniform Collateral Data PortalSM (UCDPSM).

****By the end of the event the room was buzzing with news and new ideas. It was at this point that PROGRESS in Lending Association announced its own new. We have launched an industry app for the iPad that will truly bring about more industry advancement. This app is unique in that it doesn’t just display content from our company, it displays content from all industry participants as well. The app is currently following three different industry Twitter accounts, it includes 11 industry white paper, videos from lenders like the Provident Bank, and all the latest news and analysis from our company as well.

****Our goal was to bring together different forms of content in a variety of different media all in one place. We are now giving thought leaders and visionaries a platform to express their ideas in an increasingly mobile world. We encourage you to download this free app on iTunes today. What an event. We want to thank all of our sponsors, speakers and attendees for their support! In the end though, ENGAGE 2011 doesn’t have to be a single-day event, the spirit goes on every day in this new app and everything that PROGRESS in Lending does.

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.