RESPA-TILA Checkpoint!

On November 20, 2013, the Consumer Financial Protection Bureau released the nearly 1,900-page final RESPA-TILA Integrated Disclosures Rule. During that time, the mortgage industry was in the midst of complying with all the Qualified Mortgage requirements to meet the January 10, 2014 deadline. Who had time to think about what was yet to come? And now, we are once again faced with another monumental milestone to meet the requirements set out by the CFPB to be implemented by August 1, 2015. With January 10 long behind us, it is time to focus all efforts on the task at hand for the new Loan Estimate and Closing Disclosure – essentially unbundling everything that was done in 2010 and then some.

The CFPB set out to accomplish four goals: easier to use disclosure forms, improved consumer understanding, better comparison shopping and avoiding costly surprises at the closing table. Basically, it is to eliminate confusion for the American consumer and rectify any inconsistencies or conflicting information and overlap. This is great for the consumer, but not so much for the lender and vendor community. Let’s take a brief look at why this will be one of the biggest challenges yet in the history of this industry.

First and foremost, the responsibility and indeed enormous risk lies squarely on the shoulders of the lender with the penalties for noncompliance higher than ever. The total process from disclosing through closing rests solely on the lender to comply, and the requirements around producing the Loan Estimate and Closing Disclosure will fundamentally change mortgage operations. Failure to meet the requirements could result in unprecedented fine amounts. Lender delays on disclosing improperly and are found to be caused “knowingly” could face penalties as high as $1 million per day and penalties for disclosure violation under TILA unintentionally could result in a $4,000 fine per violation – not including damages and attorney fees.

That said, the disclosure form creation and changes are not simply just cosmetic. Here is a bulleted list of critical items the lender must address while implementing these changes:

>> Ensuring calculations are accurate as the fees and charges are now itemized and alphabetized so consumer knows what they are paying for

>> Timing and delivery of Loan Estimate, Re-disclosures and Closing Disclosure with knowledge of defined “business days”

>> Impact on technology/mortgage systems to accommodate necessary changes – huge challenge for IT managing dual systems and necessary data requirements

>> Delays in closing process

>> Complete rework of internal policies and procedures

>> Extensive re-training for departments and staff

>> A detailed, planned implementation

>> Controlled coordination and vetting of settlement providers

Lastly, and most important is for lenders to have a trusted and reliable working relationship with their document provider to ensure compliance is met to mitigate risk throughout this process. The overall time, effort and cost to implement these fundamental changes within an organization will increase enough, but it doesn’t need to be exacerbated exponentially due to inaccuracy and/or a failed implementation. The time to act is now to be fully prepared holistically for August 1, 2015.

About The Author

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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.

A New Type Of Homebuyer

Millennial borrowers, those 72 million individuals born between 1980 and the turn of the century, are now of the age that has traditionally been the time during which a generation begins to invest in acquiring a home. This should be good news, but it appears that the emergence of this generation as a driver of new home sales is just not happening. Why is that? Well, there are probably as many answers as there are members of the generation, but there are a few that seem to have credence.

This generation does not see homeownership as a positive or a meaningful way to spend their income. Having lived through the financial crisis caused by the collapse in housing and in many cases learning first-hand how a home that constitutes a major part of a family’s wealth can be lost almost over-night, they are not inclined to commit the same mistakes their parents did.

For members of this generation that are interested in buying, they have no desire to obtain one of the many suburban mini-mansions. Instead, they are more interested in securing a nice condo, more than likely in or close to a metropolitan area. These individuals are putting off families for the “fun” of being free of housekeeping, yard work and kiddy games. Because of this, many builders and Realtors are seeing the demand for condos increasing. Even Miami has started building more condominium units.

Another factor driving this generation away from home purchases is the overwhelming student debt they have. Schooling costs have skyrocketed and as a result, young professionals are leaving school with student loan debt in the hundreds of thousands of dollars. Regardless of the fact that starting salaries are increasing, these debts are quickly absorbing any disposable cash that they may have. As a result it is all too common to find that these individuals have moved back home just so they can more quickly pay off these debts. For those not going to college, pay rates in the lower economic bracket is rapidly losing the race to keep up with increasing costs.

On the flip side, this generation is also turned off by the laborious, paper-intensive and intrusive process of securing a mortgage. For the generation that grew up with computers and have driven the acceptance of “an app for that,” actually pulling paper together and completing an application is overwhelming. They expect to find a mortgage they want, answer a couple of questions and have an approval within minutes. After all, that is the way they do everything else, so why should a mortgage be any different?

Many lenders, reaching out to these potential borrowers, have been attempting to lure them in with more and more technology; obtaining lots of information through the Internet and giving “pre-approvals” in a matter of minutes. But one thing we must consider is the risk associated with this approach. Since we have seen first-hand what substituting partial or inaccurate data can do to loan performance, shouldn’t we be cautious about jumping headlong into this abbreviated underwriting analysis?

While this generation certainly is tech savvy and eager to embrace the joys of adulthood, they have also been criticized for expecting everything without putting in the effort that other generations have had to invest in their future. Employers repeatedly state that these individuals expect to receive regular promotions and pay raises just for doing their jobs. They are quick to quit a company when things don’t go their way and are not necessarily concerned when they don’t have another job to go to. It seems to me that the industry should be glad that the millennial generation is not yet looking for financing. Our industry may better off not providing loans to this generation until they mature sufficiently to understand that they have to pay them back.

About The Author

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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.

Three Changes That We All Must Face

The mark of a great leader is how he or she responds to change. The very idea of change is unsettling. We like things the way they are. The status quo is comfortable, and it’s much easier to ride a wave of success than to achieve it by clawing your way out of the undertow. But change is inevitable. “Change is,” as it has famously been said, “the only constant.”

There are many trends occurring in our industry, as well as within the global marketplace, that can have a dramatic effect on the way we do business. Those of us who are still competing in the business twenty years from now will be those who will have dealt with these changes in the best way possible. Success has nothing to do with how effectively you can avoid industry challenges; it has everything to do with the way you adapt to them.

One dramatic shift that poses an endless array of challenges to mortgage professionals is the subject that has probably been covered recently more than any other: regulation. The extent to which the industry is being subject to scrutiny by governing bodies has been increasing exponentially in recent years — and we in the industry can’t do anything about it. Or, can we? There are two ways of countering the pressures placed on us by regulation. You could cut corners and seek ways around the regulations. But, of course, that’s risky and shows a lack of integrity. The better way is to get involved in organizations lobbying for the industry. Just like everyone else in the country, we in the mortgage industry have a voice. Let’s use it.

Another dramatic shift has occurred in the way people shop for homes. People have more access to information and, therefore, less need of professionals to make those decisions. Primarily, this shift is the product of the same revolution that has affected every other industry in the economy: the Internet. Ironically, this shift has made strong relationships even more important. People have more information but less time to process it. Therefore, they seek out professionals they can trust. Building strong connections with Realtors, consumers, and other industry partners is absolutely essential in this new economy.

Finally, there has been a tremendous shift in the way people view their work. Into the future, as millennials make up an increasingly greater percentage of the workforce, their values are going to come to dominate in the mortgage industry as much as every other. In relation to work, this new generation tends to care less about traditional incentives such as monetary compensation and other financial perks. Instead, they want to find meaning and fulfillment in their work. Great leaders will turn this shift to their advantage and place an increasingly greater amount of focus on building company culture.

There is no question: now is a pivotal time for our industry. Pressure is being placed upon the best of us from every direction. But it’s only in the most difficult of times that we are able to tell who the truly great leaders are. Survival isn’t about avoiding; it’s about enduring and adapting. Where will you be twenty years down the road? It all starts with the next step you take right now.

About The Author

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David Lykken has garnered a national reputation as a visionary, entrepreneur and business leader within the mortgage industry. He has also become a regular guest on the FOX Business News with Neil Cavuto, Stuart Varney, Liz Claman, Dave Asman and others. He has been a special guest of Governor Mike Huckabee on FOX News’ #1 weekend rated program “Huckabee”. He has appeared several times on the CBS Evening News, Bloomberg TV & radio, NPR and many radio shows. On matters related to the economy, housing and mortgage lending, David is frequently quoted in leading newspapers across the country as well as the Wall Street Journal and the New York Post. Additionally, David has his own national weekly radio program called “Lykken On Lending” that can be heard each Monday at Noon Central time by going to www.LykkenOnLending.com .

As co-founder and Managing Partner of KLS Consulting doing business as Mortgage Banking Solutions, David Lykken has over 37 years of management experience as an owner/operator with in depth expertise in real estate finance and housing. His knowledge and skills comprise a unique blend of technology and business strategy. Above all else, David loves helping business owners and executives navigate through extremely difficult business circumstances helping them overcome seemingly insurmountable obstacles while rediscovering themselves and their passion for life and living.

Dave is married, has two daughters and currently resides in the beautiful Hill Country of Central Texas near Austin, Texas. David received a bachelor’s degree in 1973 year from Pacific Lutheran University in Tacoma, Washington.

Our Industry In Five Years

There is much talk about new regulation. You can’t speak to any mortgage professional for too long before they start discussing the disclosure changes scheduled for next year. If you sum up the mortgage environment today, what it really boils down to is a time in our space that will be defined by how the industry reacts to change. So, hypothetically, if we look out five years from now, the question is: How much different will the mortgage industry be as a result of the shifting landscape?

“I believe that past is prolog, and I doubt that there will be any revolutionary changes that aren’t already on the drawing board,” answered John Liston, a part owner of ASC, the company that offers the Power Lender loan origination system. “I believe there will be increasing adoption of mortgage industry data standards, led in part by the growing influence of the Consumer Financial Protection Bureau (CFPB). I also believe there will finally be an interoperable electronic mortgage standard that supports electronic mortgage document interchange.

“However,” continued Liston, “I also believe that e-mortgage standard will achieve only slow acceptance. I believe there will be increasing support of lending applications on mobile devices. And from a purely business standpoint, I think there will be continuing consolidation of lending institutions due to the high cost of compliance, also in part due to the CFPB.”

Others see a far different mortgage industry five years from now when all things electronic are much more commonplace. “Surely the mortgage industry will continue to evolve in response to the regulatory forces that are being applied to lenders and advances in technology will continue to drive consumers into mobile channels for applications, disclosures, electronic signing, recording, and note vaulting,” noted Chris Appie, an attorney and Vice President of Products at Compliance Systems, Inc. (CSi). CSi is a provider of financial transaction technology and has expertise serving over 1,400 financial institutions across the United States. “I think that the ability to consume loan-specific data from the Uniform Closing Dataset will provide a more reliable pool of loans that investors can rely on and they will re-enter the market in a big way, regardless of the fate of Fannie/Freddie.

“We’re coming out of the compliance spin cycle and keeping all the regulatory and market-driven technology requirements on the customer-facing side in check will drive more lenders to seek comprehensive risk-management solutions to automate unstable manual processes,” added Appie. “This is an emerging need today, and within a few years I believe that risk management at the transaction level will become a basic requirement of technology providers.”

Even thought leaders on the servicing side of the business like Joseph Badalamenti, who got his start in the default management industry in 1967 as a HUD contractor, sees a more tech-savvy industry on the horizon. Badalamenti has 43 years of industry experience to his credit and over 5 million inspections later, he has built Five Brothers into a highly successful and respected industry leader offering a full range of default management services and technology solutions.

“Five years from now, the mortgage industry will reward those who in 2014 invested proactively in new technologies and operational strategies to keep pace with a complex, fast evolving regulatory landscape,” he said. “Success—particularly on the default servicing side—will mean working with the right third-party providers to achieve total visibility, control and process integration: The field service provider is now a critical and legally-bound link in the compliance chain. The best-prepared and most qualified providers will deliver the specialized knowledge, competencies and resources needed to help banks effectively mitigate compliance risk while dealing with the inevitable upward pressure on compliance costs.”

But the rubber really hits the road with the mortgage lender. Will they truly embrace what could be revolutionary change over the next five years?

“I am sometimes surprised at the twists and turns the mortgage industry takes,” pointed out Paul Anastos, President of Mortgage Master, a super-regional mortgage lender and one of the Country’s largest privately-owned mortgage companies. “For the past five years, we have seen many changes—some for the better, and others for the worse. Going forward, the industry will continue to experience greater oversight/scrutiny by regulators and the agencies. I anticipate this oversight to increase industry consolidation.

“However, at the same time we will begin to see some widening of the credit box to make it easier for responsible borrowers to obtain a mortgage,” continued Anastos. “As is always the case in the mortgage industry, it is about finding the perfect marriage between regulatory oversight and opportunity for worthy borrowers. All I really know is there will be changes, and successful companies like Mortgage Master will be prepared for them and prosper.”

I hope that all lenders feel the same way, because if they don’t, I fear that they won’t be in business five years from now.

About The Author

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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.

Compliance Report: The CFPB Three Years Later

It’s been more than three years since the Consumer Financial Protection Bureau (CFPB) was created “to make markets for consumer financial products and services work for Americans,” according to its mission statement. While many improvements have been made, there are still numerous lenders and services trying to meet regulatory requirements. For many – especially small- to mid-size institutions – challenges such as the high costs of compliance, lack of bandwidth for compliance expertise, increasing technology complexities and increased urgency of operations training have stifled lenders’ and services’ ability to meet the already implemented requirements. These challenges will only worsen as new regulations role out next August.

The mortgage industry continues to work diligently to interpret and implement all the new current and future regulations to avoid the CFPB and its enforcement powers. In fact, lenders, servicers and vendors face severe fines and penalties if found in violation of a law. Even if a consumer federal law is violated with no intention and was clearly an error, the CFPB has the power to fine the organization $5,000 per day. If the organization knew about the violation, the fine can be as high as $1 million per day, which can ultimately shut down a lender or servicer.

These broad powers have gained the attention of legislators and industry experts, who are working to overturn some of the CFPB’s power on the grounds that it has no statute of limitations due to the way the Dodd Frank Act was written. In particular, many have concerns with the power given and utilized around Unfair, Deceptive and Abusive Acts or Practices (UDAAP).

Regardless, after three years, the CFPB is continuing to move forward to build strong compliance requirements, and lenders and servicers must continue to make investments in technology and services to comply with those new rules. The cost of maintaining regulatory compliance, however, will continue to have a significant impact on lenders and servicers, but the costs of non-compliance will also have consequences.

To make the most out of technology investments without breaking the bank while also remaining compliant and avoiding the even more costly fines, lenders and servicers should leverage either a cloud-based compliance tool or a CFPB mock audit to bring out regulatory issues before an actual regulatory review.

By leveraging an automated cloud-based compliance check solution or comprehensive audit, financial institutions eliminate the CFPB’s severe consequences by ensuring compliance with the changing regulatory environment, as well as better prepare for future regulatory changes. In a shared services model, lenders and servicers are also able to leverage compliance resources, which combat out-of-control costs, mitigates potential fines and ultimately results in cost-containment for consumers.

Ideally, an effective web-based compliance check or a more comprehensive mock audit will contain a series of questions. Lenders and servicers should then be guided through the review process to complete the answers, which are then analyzed using classifications in line with CFPB guidelines to calculate the risk. Financial institutions should then be provided a detailed report including compartment risk weightings, trends and high-risk items, which can be provided to regulators as well as used for action plans.

Looking ahead, the future certainly holds more regulations, investigations and penalties for those unprepared for the CFPB. Whether investing in a shared service model through a SaaS, cloud-based platform or a more comprehensive mock audit, lenders and servicers will benefit from peace of mind, reduced costs and improved quality – not to mention creating a safer experience for the consumer.

About The Author

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Deana Elkins is vice president of Compliance Solutions for ISGN, an end-to-end provider of mortgage technology solutions and services. For more information about ISGN’s valuation services, visit www.isgn.com. Be sure to check out ISGN’s upcoming issue of Mortgage Radar for more on the CFPB and compliance at http://www.isgn.com/insight/mortgageradar.htm.

Great Websites Deliver A Dynamic User Experience

There is intense pressure on lenders today; origination volumes are down, constantly changing rules and regulations have significantly added to the cost to originate loans and competition is fierce. Lenders are looking for innovative ways to attract new borrowers. Online loan applications and lead generation will increase as lenders look to find more profitable ways to originate.

In today’s market many borrowers start the mortgage process online, searching for local companies or the lowest rate from national lenders. It is critical to have a presence where potential borrowers are starting the mortgage process. Unfortunately, just having a website is no longer enough. Borrowers expect more from their lender and that includes a great website.

Below are some points for what we think makes for a great mortgage website.

  1. Visually appealing design that matches corporate branding

Brand consistency across all aspects of your corporate brand is vital. But beyond brand consistency, a great website delivers appealing design that doesn’t look like every one of your competitors’ website.

  1. Simple navigation menus (“Don’t Make Me Think”)

Too many times companies over complicate their website. They try to inform the prospect of every conceivable thing that they offer or could potentially provide. The problem is that when navigation is complicated your potential borrower just goes to one of your competitors instead of trying to figure out your navigation. Simple, intuitive navigation is what today’s borrowers are looking for.

  1. Useful content for borrowers and referral partners

Borrowers and your referral partners are looking for content that is engaging and useful. Great websites deliver highly engaging and relevant content that allows borrowers to make an informed decision so that they can do business with your organization and stop searching your competitors’ websites.

  1. Powerful Call-to-Action buttons (“Apply Online”)

You can create a website that is visually appealing with simple navigation and great content and still not get the potential borrowers business because they didn’t know what to do next. Powerful Call-to-Action buttons direct the borrower to what they need to do next and help lock in your prospect.

  1. Domain name that’s easy to remember

The goal of a great website is to make it easy for your prospective borrowers to do business with you. Having a domain name that is easy to remember allows your prospect to easily remember your website when the time comes for them to begin their mortgage process online.

  1. Integration to back office systems (LOS & CRM)

Along with a great web experience for your potential borrowers, great websites deliver integration with your back office systems (LOS), which helps increase the profitability of each loan by saving you time and significantly reducing errors.

  1. Can be updated quickly (doesn’t take a week)

Great websites allow businesses to quickly and easily update their website to respond to constantly changing market conditions and competitive forces. If it takes weeks to update your website your competitive advantage will be lost.

  1. Mobile and tablet device friendly

Today’s borrowers are on the go and accessing website from their mobile phones and tablets. Your website must be mobile and tablet friendly or your potential borrower will just look elsewhere.

Great websites deliver a dynamic user experience while leveling the playing field for lenders of all sizes.

About The Author

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Wayne Steagall is the Founder and President of Lending Manager. As President of the company, Wayne works to help mortgage companies take their business online. He works with both customers and partners to help streamline their mortgage processes through automation and technology integrations. Over the last 18 months Lending Manager has expanded to over 3,500 loan officers currently process over $2 billion in loan applications online per month.

Legitimizing Home Equity Lending Delinquency Concerns

Between 2004 and 2008, originations peaked thanks to low home prices and relaxed credit standards. Most of us who recall home equity lending’s fever pitch are not shocked when we hear that HELOCs opened between 2004 and 2008 account for 60 percent of today’s outstanding loans. Now, 10 years removed from origination, these loans are beginning to reset into amortization and borrowers will transition from interest-only payments to paying down the principal.

An estimated $221 billion in HELOC loans will hit the market from 2014-2018, but many borrowers are unprepared or incapable to make the higher payments, which can increase hundreds of dollars per month and include interest, principle and a balloon payment in some cases. This once-emerging threat that loomed on the horizon is now very real – delinquency rates on these lines of credit are doubling at their 10-year mark.

Thankfully, I am not the only person that is concerned with the coming waves of HELOC resets. The FDIC, OCC, Federal Reserve Board and NCUA released a financial institution letter on July 1, 2014, which is intended to promulgate risk management principles and expectations that FDIC-insured banks should adhere to as they prepare to field the incoming resets. First, I commend these agencies for proactively addressing this issue, emphasizing the importance of evaluating borrowers and measure their financial capacity to make full repayments. The waves of resetting HELOCs are already here and will have significant impacts on home equity portfolios and first-lien mortgages. The Consumer Financial Protection Bureau requires servicers to notify borrowers of a reset 120 days in advance and many lenders are open to loan modifications and may be willing to discuss this possibility in advance to prevent the borrower from collapsing into financial crisis. However, we need to know more about borrowers so that we can proactively assist those who will have a higher propensity to become delinquent.

Evaluating borrower credit risk is incredibly critical in this process, but can mitigate the end-of-draw exposure within HELOC portfolios when properly executed. Today, there is a sea of comprehensive data, such as property and credit information, that lenders can leverage to pre-approve borrowers who do have the ability to pay. Still, there are many profile specifics, such as employment and income, which are difficult to assess without some degree of borrower involvement. This is where exceptional customer service must be provided. Why make a borrower provide all of the documentation to prove ability to repay, such as paystubs, W-2’s, tax returns when all of this documentation can be secured by the lender with the borrower’s consent? Customer satisfaction is the lender’s life support and is critical to remaining competitive in this market. Borrowers want an easy process and if you don’t provide that, they will go to someone who does.

I encourage all lenders to work to increase communication and transparency, while making sure that they are leveraging the most updated FICO scores, credit attributes, debt-to-income information and other vital data. These attributes empower lenders to better understand their risk exposure and develop modification strategies if necessary.

About The Author

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Rosie Biundo is Senior Director of Product Marketing for Equifax, a global leader in consumer, commercial and workforce information solutions that provide businesses of all sizes and consumers with insight and information. For more information, please visit www.equifax.com.

Are Your Borrowers Engaged?

Borrowers today are more connected than ever. You only need to look around you to see evidence of this. The next time you are walking down the street, sitting at a restaurant or just waiting in line at the grocery store, take a look at how many people have their noses buried in their electronic devices. Today’s do-it-yourself generations are connecting with the world in ways unimagined only a few short years ago. Reading, shopping, music, entertainment and even banking are industries that are being changed by consumer’s immediate access to a wide variety of content. The concept of idle time has been replaced with information gathering. But with all of this content to choose from, how can you stand out to your customers and prospects?

The key is to engage your customers and give them fresh and relevant content before, during and after their loan process. Become a go-to resource that they can count on when they need information or have questions regarding the lending or home-buying process. By becoming a trusted resource prior to them needing a loan, they are more likely to use your services when the time arrives.

There are plenty of tools that allow you to actively engage your customers. The first and most obvious is Social Media. Services like Facebook, Linked-In and Twitter allow you to easily get your message out to a wide variety of consumers. You can use this medium to promote new products, educate consumers or simply drive traffic to your own website.

Speaking of your website, you want to make sure that once a prospect arrives that the engagement continues. Include content that appeals to your client base and keep it updated. Change your content frequently. If a consumer knows that new information is posted regularly, they are more likely to return.

But the most important way of engaging visitors once they arrive at your website is through two-way communication. Don’t just present information. Interact with your customers. Answer their questions and get their input. Live Chat is a great tool that allows you to have an online conversation with a prospect in real time. Being available to help a prospect with questions without them having to pick up a phone and call you will increase customer satisfaction and drive additional throughput. For those times that real-time communication isn’t needed, a secure messaging system is ideal. Secure messaging is preferred over e-mail due to security concerns and the type of information that may be exchanged during the loan process.

Speaking of security, another great tool that you can use to keep customers engaged is document exchange. More and more consumers are choosing to go paperless and desire their documents electronically. But delivering documents electronically is only half of the battle. While many lenders have implemented a secure delivery system, they have no way to securely accept documents back from a borrower. By implementing a true document exchange system for both delivering and receiving documents electronically, you can take days off of the loan process.

And finally, once the loan process is completed, continue to engage your customers with content regarding their new purchase. Update them with information about their account, inform them of special deals or offers that you may have, or advise them on other programs or services that may benefit them. By being a resource rather than just a vendor, you can build a relationship that both parties can benefit from for many years.

About The Author

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Randy Schmidt is President of Data-Vision, Inc. and is responsible for overall operation and strategic planning for the company. Randy became involved in the IT side of mortgage banking almost 30 years ago and has been involved in numerous projects on both the origination and servicing side of the business. In 1993, Randy co-founded Data-Vision, Inc., in Mishawaka, Indiana as a Web design company. He then combined his previous mortgage experience with Internet knowledge to bring the speed, power and availability of the internet to the Mortgage industry. He can be reached at rschmidt@d-vision.com

Here’s How To Grow Your Business

Loan volume is decreasing and more and more lenders are finding it hard to be profitable. As a result a lot of lenders are going out of business and others are merging. These conditions are not great for the technology vendors that serve our market. For technology vendors it means more competition to keep existing clients and get new ones.

So, how do you grow your business in these conditions? In an article entitled “Want to Make Your Business Grow? Become a Thought Leader — Quickly” by Mitchell Levy, he shares some really insightful ideas. First, he suggests that business success of a product or service is not just based on the brand of the company, but also on the brand and reputation of the people that run it.

Investing time and energy in pushing your personal brand builds credibility and enhances the reputation of not just yourself but your company, too. The most commonly accepted practice to do that today is to establish yourself as a thought leader. You might be thinking to yourself, “I don’t have time for that: I need to close business and satisfy my existing customers.” Well, not all personal branding strategies need to be time consuming, especially when you are working with an outside expert in the field like NexLevel Advisors, for example.

Here are a few tips on generating positive results within a reasonable amount of time:

Identify your area of expertise. A thought leader is defined as the go-to expert in a particular space. Many entrepreneurs and executives choose to concentrate on areas they have had a lot of past experience in. For instance, an individual may focus on branding, marketing or starting a company.

Keep in mind that the past experience needs to correlate with what you want to be known for in the future. Choose an area that will bring in followers that can be either customers or advocates of what your company is selling.

Beef up your LinkedIn profile. If you don’t have a good, robust profile on LinkedIn, you need one. Inevitably, future advocates looking to learn more about you and your company will end up on your LinkedIn profile. The question you have to ask yourself is, “Does my LinkedIn profile sell me and my company?” If your profile looks like a resume, you missed the point of LinkedIn. Your profile needs to look like a SEO landing page for you and your brand.

Follow other thought leaders in your space. We are now in a world where advocate marketing is becoming the most effective form of marketing. One will believe their friends and recognized experts more than a website — and significantly more than a salesperson.

Go out of your way to start following the thought leaders and influencers in the space you’re playing in on social media. Comment on their LinkedIn post and interact with them in LinkedIn groups. Also, set up Twitter lists and re-tweet and favorite their content. Comment on their blogs. After some interaction, befriend them on Facebook. Getting to know them and more importantly, getting them to know you will pay off in spades.

Create, curate and share content. You must share content. You must share good compelling content. A good rule of thumb is to use the 80/20 rule. Create 20 percent original content and curate the remaining 80 percent. There are experts like NexLevel Advisors and others that can help you create really compelling content.

Follow through. When customers call, you’re going to call back. When customers send you an e-mail, you’re going to respond (or at least you should). When customers, influencers, advocates and others connect to you, you need to respond. (It isn’t called social media for nothing.)

All of this may seem cumbersome, but it really pays off. So get out there and grow your business.

About The Author

[author_bio]

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.

Getting Better Before Getting Caught

In the world of appraisal operations, there’s a new compliance topic every lender and AMC is talking about now. Quality assurance has always been of critical interest, but since the OCC, CFPB, and Fannie Mae have recently issued bulletins regarding their requirements for appraisal quality assurance strategies, the topic has moved squarely into the realm of compliance and is getting more and more scrutiny.

Every institution has its own internal goals and processes for appraisal quality assurance, and we’ve been asked by many lenders and AMCs for industry best practice guidelines. Anyone can download our free white paper at www.MercuryVMP.com/QC to get valuable recommendations and lists of warning signs.

But even after reading the white paper and implementing new QC processes inside your organization, you’ll be left with a few critical questions, such as: How can you make sure your process really works? How can you verify that your process actually results in the level of appraisal quality the regulators and investors demand? How can you ensure you uncover your own vulnerabilities so you can correct them before they cost you?

We’ve helped many lenders and AMCs answer these questions and it’s a great idea to test your own processes to verify you’re getting the desired results. Unfortunately, we all know there can be a wide, wide margin between intention and reality so testing is absolutely critical.

When you have quality assurance processes in place, here are a few easy ways you can test your results.

First, Run pre-funding spot checks on randomly selected appraisals. Pass a sample population of your appraisals through an automated quality control diagnostic tool. You don’t have to do a time-consuming search for QC products or commit to use the tool on all appraisals if you don’t need to. Just choose a tool you can use on an as-needed basis, without contracts or required minimums, so you can spot check that your quality assurance strategy is producing the results you need for compliance.

Second, Run post-funding spot checks on appraisal quality. You can use the same tools mentioned above to check your older appraisals to verify your processes are working.

Spot-checking appraisals is incredibly valuable in determining the success of your quality control processes. Your findings will help you further tailor your pre-funding appraisal quality control measures, and help you uncover risks and vulnerabilities in your strategy before your shortcomings can have drastic consequences.

Any lender or AMC who has implemented a third party QC tool into their daily workflow will tell you it’s not always easy to identify the best option, or negotiate terms favorable to the institution so you’re not overpaying or being forced to use and pay for the tool on more reports than necessary. That being said, the key to success here is to find a QC tool that’s easy to access without contracts or minimums, so it’s available to use on a few appraisals, or just as needed.

Even if you already use third-party QC tools as a part of your internal quality control process, spot-checking your results by periodically testing against an additional QC check is prudent and will further minimize your risk.

About The Author

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Jennifer Miller

Jennifer Miller is president of Mercury Network, a web-based software platform used by more than 600 lenders and AMCs to manage compliant collateral valuation workflow. Jennifer can be reached at Jennifer@MercuryVMP.com.