TLI-TGarritano

Lenders Innovate, Too

We always talk about technology vendors innovating, but lenders are innovating, as well. For Example. American Financial Resources, Inc., an approved Fannie Mae, Ginnie Mae and Freddie Mac seller/servicer, the leading sponsored originator for FHA 203k loans and one of the nation’s leading independent mortgage originators, has launched MyLoanCenter, a new B2B technology solution to streamline and improve the way brokers communicate with their customers.

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MyLoanCenter is a free, mobile-optimized, white-label platform that facilitates real-time communication between the broker, borrower and lender, as well as effective monitoring of the loan at every stage of the process. It can help brokers better manage their client relationships and keep track of important transactions, while empowering the borrower by allowing them to remain constantly apprised of their loan status.

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The platform offers a range of innovative features, which include:

>> Admin Control – highly customizable settings that allow brokers to apply personal branding to the platform interface, create and manage internal teams, edit branch permissions and more

>> Loan Pipeline and Pipeline Management – enables brokers to view and sort their existing loan pipeline, register new loans, access pricing, order appraisals and conduct a loan estimate review expeditiously

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>> Loan Feed – provides brokers and borrowers alike with the opportunity to view real-time updates pertaining to the status of their loan, and any outstanding action items

>> Newsroom – helps users to remain abreast of pertinent news regarding regulatory updates, industry news and updates to the platform

>> Data Sync – MyLoanCenter enables instant upload of necessary client and broker documents

“Technology has transformed the lives of everyday Americans in recent years and, now more than ever, they require tools that simplify and streamline seemingly complex tasks such as applying for a mortgage,” said Bill Packer, CIO at American Financial Resources. “The development of this tool underscores not only American Financial Resource’s pioneering mindset, but its commitment to ensuring an optimal experience for both brokers and lenders.”

Parsippany, NJ-based American Financial Resources is a leading wholesale, correspondent, and retail mortgage originator and servicer of residential mortgage loans. AFR has residential mortgage banking licenses in all 50 states plus HUD, FHA, Fannie Mae, Freddie Mac, VA, Guaranteed Rural Housing and Ginnie Mae authority to underwrite and service mortgage loans. The Company’s wholesale/correspondent division serves a nationwide network of more than 1,000 wholesale/correspondent brokers making it one of the largest providers of these services in the country.

About The Author

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.
TLI-Data

National Foreclosure Inventory Falls

Data from CoreLogic shows the foreclosure inventory declined by 29.6 percent and completed foreclosures declined by 42.4 percent in August 2016 compared with August 2015. The number of completed foreclosures nationwide decreased year over year from 64,000 in August 2015 to 37,000 in August 2016, representing a decrease of 69 percent from the peak of 118,221 in September 2010.

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The foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6.4 million completed foreclosures nationally, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 8.5 million homes lost to foreclosure.

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As of August 2016, the national foreclosure inventory included approximately 351,000, or 0.9 percent, of all homes with a mortgage compared with 499,000 homes, or 1.3 percent, in August 2015. The August 2016 foreclosure inventory rate is the lowest it’s been since July 2007.

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CoreLogic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due including loans in foreclosure or REO) declined by 20.6 percent from August 2015 to August 2016, with 1.1 million mortgages, or 2.8 percent, the lowest level since September 2007. The decline was geographically broad with decreases in serious delinquency in 48 states and the District of Columbia.

“Foreclosure inventory fell by 30 percent from the previous year, the largest year-over-year decline since January 2015,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The large decline in the distressed inventory has been one of the drivers of steady home price growth which helps Americans increase their home equity to support increased spending or cushion future economic risk.”

“Foreclosure rates and serious delinquency continued to trend down in August as real estate markets across many parts of the U.S. exhibit strong demand growth and rising prices,” said Anand Nallathambi, president and CEO of CoreLogic. “With the foreclosure inventory now under 1 percent nationally, the need to boost single family housing stocks through new construction will become more acute in the coming months and years.”

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Progress In Lending
The Place For Thought Leaders And Visionaries
KathleenMantych

Why Documents Are Not A Commodity

Here’s why…

Loan origination and closing production are dependent upon some form of document preparation and, unlike some other products or services in the marketplace, the need for documents has often been reduced to shopping for the best transaction price as opposed to an evaluation of how the selection of a document preparation provider can effectively mitigate compliance risk in the origination process. The general assumption is that there are enough document preparation companies in the market that provide the same product and service so, consequently, the lenders must be able to get it at the price point they want. The reality is that there is a qualitative difference in the type of document preparation products and services available to the lending community.

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Insufficient Information

Lenders do not necessarily seek ‘in depth’ information about document preparation providers if they are basing their decision on price alone. Having knowledge about what a document preparation provider actually does is dependent upon a Lender’s willingness to complete serious due diligence, with the document provider and within their own organization, to ascertain the best fit for their business processes. Lenders should insist that the team responsible for making document provider choices is completely informed as to the nuances of document preparation.

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Maintaining Compliance Standards – Setting The Bar

The landscape of the regulatory environment is constantly evolving and changing. What lenders and vendors alike need to develop and program to create a completely compliant closing documentation process is now quite overwhelming. Questions that should be asked during the due diligence phase are: What constitutes accuracy? What is the guarantee that the document packages being produced are compliant (both with respect to federal and state specific regs)? Are there data validation and compliance tests run? Are the content, calculations and compliance tests in the document package legally auditable and defensible? Does the vendor have in-house experienced, knowledgeable industry attorneys and support staff to respond, in real-time, to complex issues and questions?

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The key to effective due diligence is to address these questions with each given document provider and to be certain that regulatory compliance is a core competency within the provider’s business processes. This enables a lender’s compliance department to use the document preparation process to manage regulatory risk and to foster a culture of compliance across the lender organization.

In addition, a powerful dynamic content engine with the rules to get the right product generated, into the right business channel, and deployed is paramount. If a lender is producing loans in one state or multiple states and any rules have changed, it can be a major undertaking to adjust a form or package of forms. The document preparation vendor’s software must be designed such that it is completely automated, no matter what the state, product, program or circumstances are. The ability to have the assurance of guaranteed compliance from disclosure through closing, and in sync, is critical, particularly in this de novo TRID era.

Exceptional Quality Service

Above all, no matter how automated the process is with respect to technology and compliance services there is no substitute for the human element. It speaks to the heart of what should always be taken into consideration. One simply cannot put a price on the depth, breadth and years of experience and knowledge that go into every aspect of the document cycle for any loan product or program.

About The Author

Kathleen Mantych
Kathleen Mantych is the senior marketing director for MRG Document Technologies, a provider of legal compliance and dynamic compliant document preparation software technology to lenders nationwide. With more than 26 years experience in the mortgage industry, Mantych has held executive sales, product and alliance management positions with key mortgage technology providers. Dallas-based MRG is a document preparation practice group within the law firm of Middleberg Riddle Group putting the company in the unique position of its dynamic document content being created and tested by an in-house team of compliance attorneys. MRG owns its own legal content as well as its own calculation engine and compliance tests, ensuring accuracy for its lender customers.
DGreen

Seeds Of Digital Change In The Real Estate Market

Remember the days when stacks of paper, numerous phone calls, and “snail mail” made up the heart of the mortgage process? Yes, we are referring to those days in the not-so-distant past before the technology revolution made the all-digital mortgage a possibility. As we’ve seen, this technology revolution took the mortgage industry by storm, drastically improving day-to-day operations and increasing efficiency. A similar technological future awaits the home seeking process. As this future reveals itself, it is in our best interest as lenders to remain up to date with these changes to foster collaboration with real estate agents. Advanced planning and networking now will lead to a natural pipeline of referrals, allowing our future origination business to grow in unprecedented ways.

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The initial stages of searching for a home have become almost exclusively digital, activating yet another technological revolution. Logically, the initial home buying effort begins with a simple online search to gauge market availability and pricing while also honing in on certain types of homes or neighborhoods. According to a recent report, about 90% of prospective home buyers use some type of online search in their home buying process. As millennials continue to make up more and more of the first time home buying population, the use of internet throughout the process will only increase.

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As a result of this increase, home buying technology must continue to improve as well. Outside of current online listings and search functionality, there is limited digital capability to make an offer on – and ultimately purchase – a home online. Fortunately, seeds of change are already being planted through a few digital real estate companies that offer the capability to search, list, sell, and buy properties completely online. Similar to the all-digital mortgage where lenders and borrowers are notified of status updates through loan origination software, so too will home buyers and sellers make and receive offers and updates simultaneously. At first glance, it may seem like these digital changes eliminate the need for real estate agents altogether. Quite the contrary. Traditionally, the agent has handled the networking, contracts, and negotiation that are involved in the home buying process. Although many of these components will likely be handled digitally in the future, it is in the best interest of lenders, and borrowers, to continue partnering with real estate agents for a couple of reasons.

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Networking Requires People. First, very few, if any, prospective home buyers want to buy a house sight unseen, so the agent becomes an important local resource in setting up showings. In addition to traditional showings, agents may also have the networking connections to point interested buyers in the direction of properties that would otherwise not be considered. Next, community appeal is a vital factor. Conversations with real estate agents can shed light on the unique local flair of an area, and help match the desires of the borrower with a fitting community. Realtors® may also use their local connections to recommend good inspectors, contractors, and other key individuals involved in the purchase of a home.

Digital Savviness Isn’t for Everyone. Additionally, depending on how comfortable the buyer/seller are with the online tools, the agent may be called upon to use their knowledge and expertise to perform the online negotiations and contractual components on their client’s behalf. Ultimately, this makes the process easier for both buyers and sellers, as well as ensures compliance from a legal standpoint. Thus, just as the role of the loan officer progressed with the all-digital mortgage, so too will the role of the real estate agent transform according to shifting digital demands. The future belongs to agents who are willing to adapt to these demands and take on more of a specialized, hybrid role within the industry.

What does all of this mean for lenders? Having a strong network of real estate agents will always be a sure way to increase origination business. Despite changes in the home buying process, agents will still spend more time with the home buyer than any other party. If you have the trust of the real estate agent, you’re more likely to win the trust (and business) of the home buyer.

As the real estate market begins to perfect and streamline this new process of buying a home, the logical next step is to integrate the mortgage process with the digital purchase of the home. Think of the visibility and brand awareness that would come along with having your institution’s loan products displayed alongside a listing of the buyers’ dream home. Whether this be in the form of a partnership or direct integration with the real estate websites, there’s no doubt it would be advantageous to all parties involved. No matter what changes are thrown our way within the housing industry, there’s no doubt proper preparation and innovation are key to remaining ahead of the digital curve.

About The Author

Dan Green
As Executive Vice President, Operations for Mortgage Cadence, Dan Green works with the team to create greater efficiencies in all areas and coordinating efforts that enhance service quality and teamwork. Formerly, Green served as Chief Operating Officer/Chief Marketing Officer of Prime Alliance Solutions followed by Marketing Lead for Mortgage Cadence. Prior to that, he had an eight-year career with CUNA Mutual Mortgage where he was responsible for origination, servicing, lending technologies, process reengineering and education. With over 30 years of financial services and mortgage experience, he’s keenly interested in lending performance and performance benchmarking that helps lenders constantly increase efficiencies while enhancing the financing experience for borrowers.
TLI-RWalzak

Banal, Boring And Predictable

I recently attended the MBA’s Regulatory Compliance Conference and I’m not sure why. I know why I signed up in the first place. I wanted to learn how others were handling the implementation of all these new regulations, identify where the operational problems are with small and large lenders as well as figure the best approach for ensuring overall operational compliance while keeping costs under control. Unfortunately, it just didn’t happen.

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I guess I should have known better. While the names of the sessions teased the probable attendee with terms that indicated operational issues would be addressed, the reality was that attorneys and senior compliance staff spent most of the time telling the audience about the “law” associated with the regulations and believe you me, if you are not an attorney, this is enough to put you to sleep. Questions from the participants, even when they were about operations, were answered in very simplistic and ineffective terms. I repeatedly heard that lenders should have policies and procedures in place. Duh! Who doesn’t know that but someone should have been able to provide more detail about how that is done. There were also numerous mentions of the “CMS” required by the CFPB.   Hopefully if you were in the audience this acronym meant something to you. However, I never heard anyone discussing all the facets of such a program. For those of you who don’t know, “CMS” stand for Compliance Management System and is intended to require that all facets of the operations, not just regulatory compliance, are managed, monitored and improved in a systemic approach that ensures the reliability of the organization to produce and/or service mortgage loans.

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So what sould have been included instead? With all the expensive technology and regulatory technology resources available, lenders do not necessarily have to have an in-depth knowledge of each regulation. Regulatory compliance personnel should be focused on understanding their operational methodology and be able to discern what creates risk, in this case regulatory risk. From that perspective the conference should have provide direction on how to develop an implementation approach that is viable for the organization, including identifying the areas of weakness that may give rise to potential risk from the regulators. There should have been discussion, direction and recommendations on how to provide training for the staff on each new or changing procedure associated with the regulations. There should have been a comprehensive discussion on how the organization can monitor the effectiveness and reliability of the procedures meeting the regulatory expectations and most importantly, how to institute an effective management reporting and improvement process. None of this was provided.

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Another area that was never discussed was the costs associated with complying ith the regulations. Today many lenders spend way too much money on reviewing loan files in the hope of finding that one or two files that are non-compliant. This is a waste of time and money. Lenders, as part of a solid CMS should have developed a risk tolerance for process variation based on the reliability of the process to perform. Yet none of this was included was part of the discussion and no ideas or support was provided.

It is time for the MBA to step up, to stop presenting often repeated banter as meaningful and provide some strong support. If they choose to continue as they have been then the costs associated with attending these conference is wasted.

About The Author

Rebecca Walzak
rjbWalzak Consulting, Inc. was founded and is led by Rebecca Walzak, a leader in operational risk management programs in all areas of the consumer lending industry. In addition to consulting experience in mortgage banking, student lending and other types of consumer lending, she has hands on practical experience in these organizations as well as having held numerous positions from top to bottom of the consumer lending industry over the past 25 years.
TLI-MHammond

Technology Won’t Solve All Of Your Problems

There is a lot of talk in the mortgage industry about technology and innovation. Surely the mortgage industry needs to both innovate and automate, but this strategy alone will not solve all of the industry’s problems. In the article entitled “Carnegie’s Wisdom on Mining for Gold” by Lee Colan, he says that in today’s environment of high-velocity change, a business’s technology, product innovation or unique distribution are only fleeting advantages. In fact, the only sustainable competitive advantage is an organization’s talent and how reliably they perform.

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Andrew Carnegie came to America from his native Scotland when he was a small boy, did a variety of odd jobs, and eventually ended up as the largest steel manufacturer in the United States. At one time, he was the wealthiest man in America. To put his wealth into perspective, he built Pittsburgh’s Carnegie Steel Company, which he sold to J.P. Morgan in 1901 for $480 million. Today’s equivalent value is nearly $400 billion. He was also a great philanthropist donating the current equivalent of $79 billion to various charities, universities and libraries. At one point, he had 43 millionaires working for him. In the late 1800’s, a millionaire was a very rare person.

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A reporter asked Carnegie how he had hired 43 millionaires. Carnegie responded that those men had not been millionaires when they started working for him but had become millionaires as a result.

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The reporter’s next question was, “How did you develop these men to become so valuable to you that you have paid them this much money?” Carnegie replied that men are developed the same way gold is mined. When gold is mined, several tons of dirt must be moved to get an ounce of gold, but one doesn’t go into the mine looking for dirt – one goes in looking for the gold.

Some leaders find themselves sitting on a mountain of gold, and yet they feel poor because they don’t know how to mine the gold from their teams.

Excellent leaders coach good employees to become great people. They help them build better lives for themselves and others. They build their employees from the inside out… inspiring excellence at work and in life.

As the late, great UCLA basketball coach, John Wooden, said, “A good coach can change a game. A great coach can change a life.” So, we should all automate and innovate, but we shouldn’t forget about how to build a successful business populated by talented and successful people.

About The Author

Michael Hammond
Michael Hammond is chief strategy officer at PROGRESS in Lending Association and is the founder and president of NexLevel Advisors. They provide solutions in business development, strategic selling, marketing, public relations and social media. He has close to two decades of leadership, management, marketing, sales and technical product experience. Michael held prior executive positions such as CEO, CMO, VP of Business Strategy, Director of Sales and Marketing and Director of Marketing for a number of leading companies. He is also only one of about 60 individuals to earn the Certified Mortgage Technologist (CMT) designation. Michael can be contacted via e-mail at mhammond@nexleveladvisors.com.
TLI-EditorsNote

Integrations Should Help Real People

We hear a lot about new technology integrations. They always talk about new functionality. That’s great, but these integrations should also be geared at helping actual borrowers. For example, Fiserv signed an agreement with CoreLogic to integrate its IntelliMod loan modification decisioning tool with LoanServ, a comprehensive servicing platform.

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“Facing default is a truly distressing situation for a borrower,” said Joe Dombrowski, director of product management, Lending Solutions, Fiserv. “The integration of LoanServ from Fiserv with CoreLogic IntelliMods enables a servicer to quickly – in real time – and accurately evaluate borrower information and present the appropriate loan modification package, thereby reducing default risk and greatly improving borrower interaction.”

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Loss mitigation demands rigorous adherence to federal requirements, and the integration means faster processing of information necessary for a rules-based analysis of workout options, including compliance with Fannie Mae and Freddie Mac requirements. Once the user selects the modification profile (term extension, rate or principal reduction), IntelliMods delivers a decision in a matter of seconds. With the integration of the IntelliMods decisioning tool from CoreLogic into LoanServ, Fiserv clients can now upload, qualify, process, route to borrowers and track loan modifications at an accelerated rate, trimming days off of the process. Follow-up of terms can be automated as well.

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“As a result of this integration with Fiserv, the CoreLogic IntelliMods platform enables servicers to take advantage of unique capabilities that provide real-time loan decisioning for Fiserv customers” said Sapan Bafna, vice president, advanced delivery engines, CoreLogic. “IntelliMods helps reduce the workload and risk associated with the evaluation of workout options, and provides further add-on solutions for data append, property ownership reports, title reports, compliant document generation, e-delivery, e-sign and recording services.”

Once approved, IntelliMods instantly generates the appropriate modification package, which can be sent to the servicer’s production house for printing, assembly and shipping or to FedEx for printing and overnight delivery to the borrower. The FedEx option includes a pre-paid return envelope and incorporates the outbound and inbound tracking numbers into IntelliMods, allowing servicers to track the package process through recordation.

About The Author

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.