The State Of Innovation

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Over 100 mortgage executives came together to attend PROGRESS in Lending Association’s Seventh Annual Innovations Awards Event. We named the top innovations of the past twelve months. After that event, we wondered what would happen if we brought together executives from the winning companies to talk about mortgage technology innovation. Where do they see the state of innovation? And what innovation is it going to take to get our industry really going strong? To get these and other questions answered, we got the winning group together. In the end, here’s what they said:

Q: Some say innovation has to be sweeping change. Others say innovation can be incremental change. How would you define innovation?

LEONARD RYAN: I would define innovation as more of a process improvement over current methods. Sometimes major breakthroughs happen after a lot of thought on process improvement. Today when we talk about innovation, it often means computer programs and their contribution to making the mortgage process faster, more secure, less complicated or instant. Thirty years ago an innovation was printing a 1003 on a laser printer. That would hardly qualify today since that is now an everyday process. In terms of your awards, it seems the more significant the process improvements, the more likely to be recognized.

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REBECCA MAYERSON: No change in mortgage banking can be sweeping due to the layers of regulation and compliance by federal, state, GSE, and big banks. So innovation must be incremental due to the risk/reward.

TIM ANDERSON: Incremental. Because the mortgage business is a highly regulated one consisting of a multitude of participants each adding a step and receiving their cut of revenue to get from point A to Z it is a hard business to affect sweeping change. Still too many players, steps touching too many different disparate systems in the process to affect sweeping change or significant impact by itself.  Because of this I don’t see a company developing something like the iPhone coming into the mortgage space with a whole new app or mobile device that is singularly going to revolutionize this business.

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The GSE’s because of their critical role in financing and market share (aggregator) have been the ones to affect real change in this business. If you look at their Uniform Mortgage Data Program, (UMDP) it’s a phased in approach at developing systems to better evaluate critical data elements to reduce risk. They moved the traditional post-closing pre-funding QC process to pre-closing QC and leveraging their new technology and regs like TRID (with three day delivery rule) to support this trend. Also because the mortgage process has very distinct processes with siloed departments dedicated to the mortgage manufacturing process, (POS, origination, processing, underwriting, closing, secondary marketing, servicing) each re-entering the same data that introduces a lot of steps, divisions, (overhead, operational costs and risk) vendor players and participants all have to agree to change their processes and automate to affect real change and ROI in this business.

CURT TEGELER: Innovation can be both sweeping and incremental. Innovation must be persistent and a mindset. It is a necessity to remain relevant in any industry and to enhance the products and services we offer. This involves implementing new strategic ideas, creating dynamic products and improving existing services. In having an innovative approach, you are increasing the probability of success and development in your business.

CRAIG ZIELAZNY: Innovation is creating an impactful solution to a problem. The innovation process can’t be boiled down to just listening to customers, though. Only through continuous and meaningful engagement can you identify real problems and execute effective solutions. It doesn’t become an innovation until the unmet need has been overcome by an appropriate and well-executed solution. Rarely is innovation the product of an individual person experiencing an “aha” moment. Ideas are easy, execution is hard and it is what makes any idea tangible.

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RICK TRIOLA: I think we all want sweeping change that solves problems quickly and delivers on the promises technologists have made and that consumers all want, but unfortunately we don’t see that, at least not in our industry. Most innovation fails because it never gets to the end user because the innovation can’t get passed through all the gatekeepers and entrenched stakeholders.

For example, the mortgage industry had the opportunity to adopt eSignatures as soon as the Federal ESign Act was signed into law in June 2000. Instead of leapfrogging over the antiquated paper processes and skipping a generation by heading directly to digital lending, too many players decided to invest instead in scanning and faxing devices and processes. Borrowers, buyers, sellers — everyone — would have loved the opportunity to just eSign instead of papering out and couriering documents all over the place, but instead our industry took more than a decade to move in the right direction.

We wish innovation would sweep down on our industry quickly, but the extensive eco-system here combined with and entrenched and outdated status quo results in new innovators being forced to ‘stand down’ while the industry accepts incremental change.

JOHN VONG: In other industries, change and innovation can happen simultaneously and dramatically. However, because the mortgage origination process is very complex, innovation in our industry tends to be more incremental and less sweeping. Take, for example, e-mortgages. As an industry, we’ve been talking about doing e-mortgages since 2000. It’s seventeen years later and less than one percent of originations are e-mortgages. One of the key reasons for this was that there were differing and competing priorities from parties within the mortgage origination and closing ecosystem including lenders, investors, warehouse banks, county recorders, notaries, and GSEs, among others, and not everyone was on the same page about digitization. Customized closing processes throughout the country is another impediment to innovation. Finally, the average borrower gets a new mortgage or a refinance infrequently compared to other common financial transactions, so they are willing (or at least have been in the past) to put up with inefficiency and inconvenience.

Q: How would you define the state of innovation in the mortgage industry? Is it thriving or in a state of decay?

CURT TEGELER: Innovation in the mortgage industry is stronger than ever. The industry is so far behind in technology innovation that it can only advance from here. There are countless opportunities to embrace innovation and the industry is becoming more and more digital. Every phase of the mortgage process is evolving, from the consumer experience to the lender experience.

CRAIG ZIELAZNY: As is the case in all industries, there are firms which innovate and those that don’t but rather choose to follow. The firms which continually innovate maintain close ties with their clients and the market, always searching for a better way to do something or to solve a seemingly unsolvable problem. The state of a firm’s innovation status is largely a function of the culture and the value placed on listening to clients and doing the math to unearth needs which are not clearly identified by the client.

RICK TRIOLA: Despite the fact that I feel our industry moves too slowly in general, we’re actually at a very exciting place right now. While we had the technology to do end-to-end digital lending a decade ago, lenders weren’t ready and consumers weren’t pushing for it. Today, consumers are ready at the same time investors and regulators are pushing for it. Even loan officers we’re talking to are excited about doing digital.

And they want to share all of the benefits of digital with borrowers, that means closing the loan from anywhere. We know this is possible because we have now completed tens of thousands of online notarizations and cracked the code around the ‘last mile’ friction of having to appear in person.

I believe that over the next few years, we’ll see a great influx of lenders moving into fully digital lending and realizing cost and time savings at the same time they offer better experiences to consumers. In 5 years, no one will deliver a mortgage on paper.

TIM ANDERSON: I think now that we have gotten past TRID this has freed up resources and initiatives to implement some change and innovation. I give Quicken Loans a lot of credit as well because everyone now wants their version of Rocket Mortgage and push to better qualify and verify the loan quicker and faster with initiatives like FannieMae’s Day One Certainty initiative and FreddieMac’ s Loan Quality Advisor tools to streamline the process. We are also seeing a major rise in finally implementing the Digital Mortgage and eClosings to complete the eProcess and deliver not only a better consumer experience but a replicatable, repeatable automated QC process that provides electronic evidence of compliance along the way.

REBECCA MAYERSON: Innovation is at the highest level in over a decade and surging. The need to lower expenses while improving the process for the customer while still protecting risk is driving innovation at a high speed.

LEONARD RYAN: Innovation in the mortgage industry is “making a comeback.” The mortgage crisis and subsequent regulations forced vendors with traditional products to spend resources on implementing those regulations. Only new companies or entrepreneurial minds during those times seemed able to develop substantial changes in process. However, I now see the start of vendors looking to make substantial changes to the process. I believe most of those changes will result in vastly reduced lender costs.

JOHN VONG: From the perspective of a technology provider, it’s thriving. Every loan origination system and service provider is enhancing its technology or developing new solutions.

From the lender perspective, however, cyclicality trumps innovation. When the rates are low and demand is high, lenders are often too busy to focus on technology and innovation. Instead they throw bodies at the problem. When volume declines, there is often a reluctance to invest. Instead, loan production is the top priority. That’s why it takes the mortgage industry a longer time to adopt or upgrade technology than other financial services sectors.

Of course, over the last few years, the risk management and compliance areas are an exception because lenders have more of an incentive to protect their companies from regulatory scrutiny after the meltdown.

Q: Lastly, if there was one innovation that you would say the mortgage industry desperately needs to happen over the next twelve months, what would it be?

REBECCA MAYERSON: Any of the Day One certainty steps that would allow All investors beyond Fannie to accept would be great for our industry.

TIM ANDERSON: A closing collaboration system that exchanges the data between the title system of record and lenders not only for TRID or final CD but the upcoming Uniform Closing Dataset (UCD) requirement coming September 25th. Most lenders look at these as separate compliance initiatives but the proper collaboration should start at time of application with the initial Loan Estimate, automatically check for compliance tolerances anytime the data or disclosures change, conduct a final reconciliation and comparison three days prior to Closing Disclosure and keep tracking 90 days after closing of any changes. This should not only include the CD but all the closing documents and then once approved be able to do a full eClosing to ensure data and document quality, integrity and compliance.

CURT TEGELER: Digital mortgages are significant for the mortgage industry. With millennials becoming a large percentage of homebuyers, being able to complete the mortgage process online is important. Bringing the lifecycle of the process from a lead to a buyer is crucial. Essentially, Realtors should have the ability to advertise and turn leads into homebuyers and borrowers digitally. Even a hybrid approach where the front-end process becomes digitized is a step in the right direction. With procedures and an evolving industry ahead of us, the ability to be move quickly is critical to long-term success, and this is done through being digital.

CRAIG ZIELAZNY: Ball games are rarely won because of home runs… It’s the team that strings together singles and doubles that will win. Our industry is no different. Each innovation will contribute to the overall improvement of the industry and the benefits delivered to the various members. If we listen to our customers and probe for a deeper understanding, we will all become innovators and help move the industry forward.

JOHN VONG: The existing traditional origination process is not geared to cater to Millennials, who have different expectations and are more tech savvy than previous generations. They don’t want to spend ninety days to get a mortgage with a traditional loan officer. Millennials want to go to online, fill out their basic information, and get instant decisioning, as well as shop for competitive rates. Traditional lenders need to significantly rethink the customer experience they offer if they want to be relevant to this growing customer segment. Moreover, both traditional and FinTech lenders are going to have to find ways to qualify non-perfect borrowers and do so in a more digital fashion.

RICK TRIOLA: From the lender’s perspective, we desperately need technologies that will reduce their costs and increase their profits in an environment with tightening margins. At the same time, they need tools that will help them compete more effectively as rates rise, refinances disappear and competition heats up.

There has never been a better time to adopt technology that will answer these needs. In my mind, it’s going to be all about online closings, anytime from anywhere, which exactly what eClose360 offers. In fact, we just ran the numbers for a new client and found that using the eClose360 platform would add $18 million in bottom line profits over the next 12 months. That’s the kind of innovation lenders need now.

Progress In Lending
The Place For Thought Leaders And Visionaries

The Art Of Opportunity, Pt. 2

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In my last article, we examined the business strategies described in The Art of Opportunity, by Marc Sniukas, Parker Lee and Matt Morasky.

Michael Porter’s classic book, The Competitive Advantage: Creating and Sustaining Superior Performance, described strategies for achieving competitive advantage by 1) becoming a cost leader, 2) differentiating your offering, or 3) focusing on a niche.

So how does The Art of Opportunity differ from these more traditional approaches championed by Porter? First of all, we see that there is a shift from focusing on achieving competitive advantage by simply being cheaper or different to finding and seizing opportunities by creating value.

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To be clear, the authors don’t suggest that the sort of traditional strategic management approaches described by Porter do not work. For some organizations and in certain industries, they work extremely well, if applied in the right way. And yet, a lot of companies nevertheless struggle when attempting to achieve their growth and innovation targets within these traditional frameworks. The following sections summarize some of the authors’ key points.

Where to look for new growth opportunity? This statement from Professor David Bell says it best, “The first principle of finding new growth is that you’re always better off going after customers who are underserved or neglected.” Why is that? The authors state, “Only by gaining a deep understanding of customers, their true needs and expectations, as well as their satisfaction or dissatisfaction with current offerings, will you gain the insights needed to develop solutions that customers really want to buy. Most companies don’t know why customers do or don’t do business with them in the first place.”

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Understand customer needs, expectations and choices: The basic idea is that customers do not buy products because they want to own the product, but because they have an objective they would like to fulfill with that product…. So, should you just ask existing customers what they want and need? Henry Ford is credited with saying, “If I had asked people what they wanted, they would have said faster horses.” Henry Ford’s customers might have wanted faster horses, but they probably also wanted something that was a bit more comfortable and convenient, needed less maintenance, and possibly was cheaper. Understanding why and when customers buy a certain product opens new ways of segmenting your market. Opportunities are a function of the chosen customer segment, its needs, and expectations toward the solution offering. Once you understand your customers’ needs and the experiences they have trying to fulfill those needs, you can investigate what stands in their way to having a satisfactory customer experience.

Understand your firm: Looking at your customers is an external search approach to uncovering growth opportunities. While looking at your company with an internal slant, the key is still to discover new opportunities for growth from existing and new customers. Once you understand why customers come to you, you will have a good sense of what you excel at doing. This is the underlying capabilities and competencies that make your company special. Think about the strengths, capabilities, and resources of your business that you could leverage to create new businesses. The book lists several questions for you to identify your valuable, rare and costly-to-imitate resources and how to organize to exploit those resources.

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Frame your growth opportunity: For starters, we are not focused on traditional forms of growth like the following:

  1. Selling more of the same: Market penetration occurs when a firm enters the market where its current products already exist or its services are provided, allowing the business to go head-to-head with incumbents in the market.
  2. Growth through mergers and acquisitions: Mergers and acquisitions ae often taken to increase the size of the firm. Some are to add capabilities and some to add product lines outside of their current core business to diversify.

Instead the authors see three types of growth:

  1. Evolutionary growth: This type of growth is closest to your core. You evolve by removing hurdles to satisfaction and barriers to consumption for you existing offerings. This could include making your products more consumer friendly or upgrading your services.
  2. Adjacent growth: This is expanding your offering to cover additional steps in the consumer experience or offering other similar products. It is closely related and complements your core. Adjacent growth bears a little more risk than evolutionary risk, as you are venturing into slightly new territory. Yet, as you are staying close to your core, nevertheless the risk is manageable.
  3. Breakthrough growth: This is the type of growth that goes well beyond the limits of your current business. This entails not only the development and launch of a completely new strategy to market an offering outside of your company’s existing business definition, but also the design of a new business model and/or revenue model as part of the new strategy. Breakthrough growth is obviously not only the most difficult, but also the riskiest type to achieve. Yet it also bears the highest rewards, if successful.

What type of growth are you aiming at? Each growth model is appropriate for specific situations. There is not one prescribed model type and, in fact, you may benefit from combining them in order to adapt your firm’s individual situation. Clarifying your objectives and the type of growth you are aiming at will enable you to focus your subsequent strategy efforts, provide your team with guidance, and avoid pursuing opportunities your company might not be comfortable with at present.

Now that you’ve identified your opportunity, how are you going to seize it? While traditional strategy would have you focus on products and services, strategic innovation means you will focus on the following:

  1. Offering: The mix of products, services and the customer experience.
  2. Business model: The way you operate and the activities to do business.
  3. Revenue model: Where the money will come from, how you set prices and how payment is done.

Although the three parts are presented in a sequential order, innovation can come from each of them. In practice, you are likely to cycle back and forth as each component informs the other. At the end of the day, you need to make sure all three parts are integrated and support each other.

The author’s research has shown that successful strategic innovators go through three phrases.

(1) The inception phase, within which an opportunity for new growth is discovered.

(2) The evolution phase, during which the offering business and revenue model are adapted.

(3) The diffusion phase, during which the focus of activities shifts from designing and crafting the strategy to scaling up the new business.

Summary: It isn’t possible to give adequate emphasis to the depth and breadth of the authors’ material here. There are many examples throughout the book of companies utilizing this process and methodology. The authors have skillfully employed visualizations, diagrams, and templates in support of their concepts. My articles have simply been an overview of this book and hopefully have piqued your interest to explore this further.

About The Author

Roger Gudobba
Roger Gudobba is passionate about the importance of quality data and its role in improving the mortgage process. He is vice president, mortgage markets at Compliance Systems and chief executive officer at PROGRESS in Lending Association. Roger has over 30 years of mortgage experience and an active participant in the Mortgage Industry Standards Maintenance Organization (MISMO) for 17 years. He was a Mortgage Banking Technology All-Star in 2005. He was the recipient of Mortgage Technology Magazine’s Steve Fraser Visionary Award in 2004 and the Lasting Impact Award in 2008. Roger can be reached at rgudobba@compliancesystems.com.

The Good, The Bad And The Reality Of AI

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When I was getting my Masters in Business Administration, one of my professors lectured about the future of business. One example he used was from a futurist’s ideas on the factory of the future. According to this individual the factory of the future would have two employees: a man and a dog. The man would be there to feed the dog and the dog would be there to make sure the man did not touch anything.

While this tale may seem laughingly far-fetched, conversations held at the recent technology conference seemed to indicate that this scenario is within the realm of possibility. Numerous discussions were held about the use of artificial intelligence (“AI”) within the mortgage banking industry and ranged from rules-based programs to utilizing programs such as optical character recognition (“OCR”) and validating document collection to produce the first “bots” within the industry. But is this really AI or is real artificial intelligence the actual use of computers that can emulate human thinking processes and contain human drives such as hunger, power and self-preservation?

Controversy abounds on the subject and not just with potential users but among the most advanced thinkers in this area. Their thoughts and beliefs are wide-ranging from the concept that AI will likely play a part in human extinction to those that believe it will improve people’s lives and give them more family and leisure time. An article in April’s Vanity Fair magazine quotes Elon Musk, the developer of Tesla cars and cost-efficient rockets allowing for the settlement of Mars, as believing AI is humanity’s “biggest existential threat.” On the opposite end of the scale, Ray Kurzweil, a futurist, has predicted that we are only 28 years away from the point where AI will far exceed human intelligence and humans will merge with this super intelligent program to create the hybrid beings of the future.

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While arguments continue at this theoretical level, most of these individuals agree that one of the greatest drawbacks to the full use of artificial intelligence is the interaction currently necessary between humans and these tools. In other words, for these programs to work, a human must verbally ask a question, make a statement or key in information. This problem goes away however with the merger of biological intelligence (human thought) and machine intelligence. To accomplish this, companies are currently working on an injectable mesh, called a neural lace, into the brain that can flash data from your brain wordlessly to your digital device or to the cloud, thereby creating unlimited computing power.

With the on-going merger of AI into businesses there is also concern about how it will be managed and controlled. Current public policy on AI is largely undetermined and the software is largely unregulated. Some of the biggest technology companies have taken it upon themselves to develop a partnership on the subject in order to explore the full range of issues, including ethical concerns. The European Union is also deeply concerned and is considering such legal issues as whether robots have personhood or should be considered more like slaves as found in Roman law.

But the question overriding all of these issues appears to be what exactly is artificial intelligence? Is it simply a bot-like program that runs rules that do simple labor intensive work or is it actually the ability of machines to think as humans and take over the entire workload of any business. And if so, what does this actually mean to employees in those businesses? Will their jobs be replaced with robots that not only collect information and compile data for a rules-based engine but actually make decisions based on the data fed into the machine’s intelligence.

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Most importantly to mortgage lenders, what does all this mean to our industry? While the fun and intellectual stimulation that comes from brain-storming these ideas generates lots of enthusiasm, if these concepts become reality, we need to be prepared to utilize them to our advantage and not be thwarted by extensive costs and back room operations.

One way to envision how these AI programs will impact the industry is to look at what has been happening in similar operations. An article by Penny Crossman in the March 16, 2017 American Banker entitled “All the Ways AI will slash Wall Street jobs” gives some insights into what we might expect. According to the author, Opimas, a capital markets consulting firm, projects that by the year 2025 artificial intelligent technologies will reduce employees in the capital markets profession by 230,000 people. Furthermore, spending for AI-related technologies is expected to be more $1.5 billion and will reach $2.8 billion annually by 2021, just four years from now. This number does not even include the start-ups that capital market firms will invest in during this period. All of this expense is expected to be offset by a 28% improvement in their cost-to-income ratios.

So where are these programs being placed? The first functions being replaced by AI technology are process-oriented jobs. These jobs are actually being replaced by lower level AI functions that are programmed to do such things as look up documents, find data and compare multiple data sets.   In addition to these process oriented jobs, those whose function is to conduct analytics on the data are also being replaced with such technology as machine learning functions. In this “deep learning” technology, AI programs digest large volumes of real-time data within a very short period of time and then “learn” to find patterns that provide insight and direction at a speed humans can’t begin to match.

Another area of capital markets feeling the impact of AI is front office sales personnel. Since initiating AI technology in this area there has been a 20% to 30% drop in headcount. In addition, many jobs in the middle and back offices are also feeling the impact. Since the majority of these jobs are processes that are connected by human manual intervention AI that brings with it image recognition can replace this human activity.

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Compliance concerns that resulted in significant headcount increases are now being taken over by AI programs that validate specific documentation and provide a more holistic view of the regulatory risk and organization compliance trends. This is one area where IBM’s Watson is proving extremely valuable.

The implementation of AI in capital markets gives an excellent overview of how this technology can be implemented in the mortgage industry. Currently, we use some lower level rules-based programs to conduct underwriting as well as OCR usage in some back-office functions. Applying the applications discussed previously, many, if not most of the job functions being conducted today by humans could in fact be replaced with future AI programs.

One good example is the use of AI to replace loan officers for taking applications and collecting data. The Rocket Mortgage program in use today by Quicken Loans is just one example. Furthermore, most of the data collection and organization process that is labeled “processing” is also easily replaced with existing sites that offer independent validation of the information utilized in making decisions.

An area that is also ripe for AI application is the title and closing function. Using OCR, data comparison and document production, can easily be completed while the risk of mistakes or problems at the closing table could be handled in real time.

Back room operations can also be easily incorporated into AI functionality since it is very much a data recognition, document collection and validation effort. Post-closing functions which now take time and massive amounts of human labor can not only be streamlined, but the data collected can be used to revise and improve the processes themselves.

While what may appear to be already included as an AI function, underwriting is actually where some of the best deep learning artificial intelligence is applicable. Since 1995 we have been using rule-based technology to conduct what we considered AI, but instead are simply automated underwriting programs. Deep learning AI offers the industry the solution that has plagued it since its inception, that of identifying the true performance risk of loans.

Today’s credit risk function continues to use static attributes to develop, expand and or shrink credit policy without knowing the potential impact on any individual applicant. This credit risk stalemate has resulted in lending programs that reject applicants that may in fact prove to be credit-worthy borrowers. This can easily be seen in such programs as affordable housing and minority lending. Using deep learning, rather than simply applying standard credit policy to an application, AI can conduct an analysis of the applicant in comparison to all probabilities of performance and decide to approve or reject. In other words, credit evaluations would be individualized for every applicant. In addition, performance probability would be the yardstick by which pricing is tabulated.

Servicing is of course, primarily manual back-office functions that AI can address. Once again a deep learning application can contain any information on taxes, insurances and related issues, transfer funds if and when needed as well as provide an escrow analysis, tax statements and individual billing statements.

Just this brief recap easily demonstrates the value of bringing AI into the mortgage lending environment. The question is “at what cost?”   There is no doubt that the advancements in AI would have the same negative impact on mortgage lending employees. In fact, the annual convention might just turn out to be a dog and a man. However, as shown above, mortgage lending is not the only industry that will feel the same impact.

There are of course risks. One significant enough to delay implementation of AI by some firms is the risk that the technological intelligence could misinterpret input information and make decisions based on that information that would be disastrous to the company. One such example has already been experienced by Wall Street to a small degree when a mention of Anne Hathaway in the news resulted in a bump in Berkshire-Hathaway’s stock. Now known as the “Hathaway Effect”, companies are implementing practices such as running validation scenarios and are placing restrictions and stops on critical process points. This of course requires human oversight and runs headlong into the issue of AI and the reduction of human jobs in the industry.

The discussion over job elimination and creation however needs to be a much broader discussion around the impact of AI in the economy overall as well as in our industry. We have to think about what the massive reductions in employment opportunities means and what type of jobs will be created as current competencies are becoming less relevant and those trained in AI technology become harder to find. This change from the use of human intelligence to artificial intelligence is similar to the change undergone by those individuals who today are labeled “white working class” as large scale manufacturing replaced humans with more advanced technology and those individuals who were educated to do manual and factory related jobs became unemployable. Those that were smart enough to take advanced training and education in the field have found new jobs, but those that haven’t are left feeling angry and disenfranchised.

New skill sets that will be in demand for AI revolve around software engineering and data science. This is of course a given. But there will also be the need for a hybrid of business and digital skills which involves individuals who are knowledgeable about the business, who understand the digital environment and know how to benefit the business by continually improving its digital footprint.

While AI continues to advance, and becomes more accepted in the industry, it would be wise of us to think of when, where and how it becomes the most advantageous to the human side of the business equation. Using AI also means finding what our function as humans involves. Are we the masters of the technology or will we become evolve to a position seen by Steve Woznick when he said, “I now feed my dog steak because I see humans being the pets for robots and I want my robots to believe pets eat steak.”

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.

Get Your Ideas Across

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For mortgage technology vendors, oftentimes they are selling ideas. They are trying to convince mortgage lenders to automate a process that is traditionally paper. That can be a hard sell because it requires the lender to embrace change. So, it’s a balancing act for vendors in that they have to both honor the existing mortgage process and make the case about how it can be improved. If you’re going to be successful, you have to be a good presenter.

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In the article entitled “How The Most Successful Presenters Pitch Their Ideas” by Ian Altman, he points out that it’s not enough to simply deliver a message. I’m flattered when I get glowing feedback from the audience after a talk. When I deliver a keynote address, I know I need to inspire, entertain, educate and also to engage the audience. My keynote address is only successful if the audience gets new ideas, can internalize those ideas, and then apply them to their world while having fun in the process.

My fellow speaker and brilliant master of ceremonies, Mark Jeffries has a great formula he shared with me during a recent discussion

After more than a decade of speaking and hosting conferences and events that include top celebrities like Serena Williams, Richard Branson and Will Smith, he’s developed a simple four-part framework that is guaranteed to wow an audience. Make no mistake, as a guy who spent years as a television personality, Mark Jeffries is a world-class master of ceremonies.

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But first, he starts by asking clients an intriguing question:

“When you’re at home in the evening, and you slump onto your couch with a nice, big martini – that’s my MO, at least – and you turn the TV on and you’re flipping through the channels and suddenly you find a channel featuring a man in a grey suit standing very still talking in a monotonous fashion with a slide deck full of words behind him, do you stay on that channel?”

Of course not, Mark gasps. “That’s the last thing we want to watch, and yet this is what we give people at conferences and events all over the world.”

Instead, he asks, why not give people what they want? Why not give them an experience they can walk away from feeling inspired and educated and entertained?

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When he works with executives on how best to present their ideas on stage, he reminds them of the word TIME.

What is TIME?

I have the good fortune to speak on many stages. I also get to experience the good, the bad, and the ugly of other speakers. Some might be brilliant, just not the style content that appeals to me. Some, however, really stand out as fan favorites for almost every audience. After years of speaking at and hosting events, Mark noticed that all the best presenters shared similar qualities. Aside from being well versed on their topics, he saw that they had what seemed like a natural charisma and command of the audience. Was that something these speakers were born with, he wondered? Or did they develop their skills?

Turns out, anyone can develop the skills needed to be a better presenter. The pros, it appeared, had TIME on their side. TIME is the acronym Mark developed to describe the key ingredients of a good presentation.

What Does It Mean?

T stands for Teach.

“We all love to be informed of something we’ve not heard before or something that perhaps changes the way we think,” Mark says. “If you can get somebody’s mind activated with a new idea, they are much more likely to listen to you. Tell them something interesting.”

I means to Inspire.

“When you inspire people, you’re not boring them with the whole process. You’re actually saying: Hold on. At the end of this, this is how different your life, your world, your customers, and your business processes are going to be. That is an inspiring picture and people respond well to that when you’re presenting,” Mark says.

M stands for Motivate.

“What you really want to do in any presentation is motivate (the audience) to some form of action,” Mark advises. “So in any presentation, whether you’re across the table (from someone) at a Starbucks or you’re standing on a stage in front of 5,000 people, you have to at least know that you’re giving them one thing they’re going to go away with.”

E means to Entertain.

As speaking coach extraordinaire, Michael Port, notes, “You want the audience to agree with your points — not with you. It’s the difference between ‘That’s right’ and ‘You’re right.”

Mark suggests, “Be real, be a real person. People buy people right? And if you don’t have that personality that is charismatic and warm and very likeable, no one is going to buy your ideas. No is going to buy what it is you’re selling.” He adds, “You have to be the likeable person. And I so often see somebody who is in front of me who is just not likeable and they must as well just give everyone a handout and sit down.

“If you develop that connection (with an audience) in your short pitch, you’ve got them. You can basically have them come around to your way of thinking in a far easier fashion than if you were brusque and arrogant.”

It’s Not About You

It’s tempting to think a presentation is all about the speaker when all eyes are on him. But the truth is, the greatest presenters know that it’s not about them. It about the audience — and their needs, desires, challenges and problems.

A pitch should never revolve around you.

“When I’m hosting events, I get to introduce business leaders and business thinkers and they get up there and they pitch, and half the time it is just not appropriate for that audience,” Mark says. “They haven’t even bothered to think about their audience or to understand the world in which their audience lives. And it fails. It falls down.”

“When you’re pitching your idea you have to be smart enough to stop and say wait a minute: what is this person actually looking to buy before I even try and sell them anything?”

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.

The Truth About Email

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It’s not uncommon for an average workday to begin after grabbing a cup of the “favorite” office brand coffee and sitting down to respond to countless emails from both internal and external people. At this point in the day, it’s unlikely the thought of becoming a victim to a phishing attack would be top of mind. And why should it be? Isn’t it safe to assume the IT department protects email, providing a level of security that the Secret Service would envy?

Unfortunately, this is simply not the case. This year, Symantec reported that 1 in 131 emails sent last year contained malware, which is the highest rate in five years. In addition, Business Email Compromise (BEC) scams, relying on spear-phishing emails, targeted over 400 businesses per day, draining $3 billion over the last three years. Some businesses never recover from an attack like this. So, if email is the problem, how can a business solve it?

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Email is Time-Consuming

Email, while digital, is still largely manual. When an email is received, there are four things that must be identified:

1.)Who is the sender of the email?

2.)What is the message saying?

3.)How should this email be organized or classified?

4.)Is there an attachment or link in the email?

Answering these four questions for every email received is time-consuming to say the least. It has been reported by the Wall Street Journal that, on average, a white-collar worker will spend 4.1 hours per day checking work email. With over half of a standard 8-hour work day dedicated to email, that leaves lenders with less than half a day to juggle getting current borrowers approved and reaching out to prospective homebuyers. Cutting back the hours spent on email can greatly improve efficiency, increase the number of loans processed, and add to overall customer satisfaction.

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Email is Insecure

An email message is only as intelligent and secure as the recipient’s ability to interpret it. This is not to say the average person can’t properly read an email. Rather, it means that cybercriminals are highly skilled and extremely deceptive. As Fortune.com put it, “Good luck seeing the difference between a domain like “Google.com” (Latin) from “Google.com” (Cyrillic).” Without very thorough and specific detection systems and user training and testing, it would be impossible to see the difference in a link to a domain name that used non-Latin characters as a disguise.

There are real limits to what humans can detect and discern about each email they receive. The business that falls for phishing communications – whether or not through its own fault – will certainly take a hit to its reputation. While there are many success stories of users detecting and blocking email phishing attempts, the criminals are making it very difficult for workers to prevent breaches.

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Now What?

Transitioning from the insecure communication methods so common in today’s lending landscape may seem like an insurmountable task. Everyone is accustomed to firing off an email to a provider or client, sending a text message, or sharing a document through an online document sharing service, but these are all forms of communication that can be intercepted. Once the phishers identify that a process is occurring, they hone in on specific transmissions and wait for the opportune moment.

This widespread issue requires the entire financial industry to unite and find a more secure process through which all communications can be sent. Moving off email servers will be no small feat. They are an integral part of every business. Unless email is supplemented with something even more efficient, businesses will undoubtedly slow down. On the other hand, email is also the easiest way for a criminal to breach a business’s security defenses – leading to the possible theft of valuable information or funds – and this could ultimately be the downfall of an organization. The only way to stop the attacks is to give the cybercriminals nothing to track, by using secured communication methods such as those that are coupled with intelligent processing.

The Future Points to Intelligent Processing

Intelligent processing can be defined as a secure framework used to structure communication that automatically recognizes and organizes information through a predefined process. Technology that utilizes intelligent processing creates communications channels that carry all messages through a secure location. Imagine a world where communication (both messages and chat conversations) between all parties involved in a transaction (such as loan officers, title agents, settlement agents, attorneys and others) are seamlessly routed through a secure web system instead of locally via your desktop and cell phone. Only the individuals permitted access can gain access. Documents and data can also be transferred securely through the system.

Remember the 4.1 hours per day people spend sorting their emails? Imagine that time greatly reduced, directly increasing productivity. For the mortgage industry, intelligent processing is a secure, automatic, digital, document exchange system and communication platform that can deliver three key benefits.

Benefit 1: Efficiency

Intelligent processing can transform inbox clutter into time-stamped communications that stay within the context of the transaction or client file in which they were created – all on a secure web system. This allows for more efficient multi-tasking and the ability to quickly switch between client files and pick the transaction up where it was last left.

When something is purchased with a credit card, the company knows which account that card is associated with and bills that account automatically. So, it makes sense for a borrower transaction to have a similar way of being identified for communications, including document submissions. While email in the workplace will certainly not be eliminated altogether, security training will be critical to enable additional efficiencies saved on the countless hours staff currently waste on manually processing their email messages.

Benefit 2: Accuracy

Human fallibility is an unavoidable reality. No one is perfect, and we all make mistakes, but automated processes do exactly what they are programmed to do, 100% of the time. Transitioning the workflow from human processing to “automated everything” results in streamlined processes.

Benefit 3: Security

As cybercrime continues to escalate, it is essential to totally rethink communication to avoid phishing attacks. Cybercrime is here to stay, and it is only getting worse. According to Juniper research: “Over the next five years, data breaches will have cost businesses a cumulative total of $8 trillion in fines, lost business and remediation costs.” And what’s worse, the financial industry is a favorite target for hackers and cybercriminals of all kinds.

Cyber criminals are becoming more aggressive. Lenders need to take action against this onslaught of elaborate phishing attacks, and intelligent processing is the first line of defense. Secure networks are already used for other aspects of banking such as credit card processing, wire transfers, and international wire transfers, so why shouldn’t the industry do the same for mortgages? If anything, these preexisting structures give the industry a precedent for protecting the data, transactions and communications related to a mortgage loan. This will be a crucial step in protecting businesses and their clients.

Using intelligent processing as the primary method of client communication can increase efficiency, enhance security, and save a lot of money. Eventually, there will be an appropriate solution for every size and type of business within the industry to safely and efficiently conduct business with each other and consumers. Lenders need to carefully vet these software options and find the solution that best fits their current business needs. The ideal solution will help protect the business while increasing the productivity of the staff.

Perhaps the silver lining to the dark cloud of cybercrime is that the intelligent processing solution will unify the entire mortgage industry, so that all parties relevant to the transaction will ultimately be able to readily communicate and exchange data and documentation at every step. This unification of the mortgage industry is past due and will surely create efficiency as well as security gains for all.

About The Author

Todd Hougaard
Todd Hougaard is Collaboration Center Product Manager for Mortgage Cadence, an Accenture Company. In this role, Todd is responsible for the strategic direction of Collaboration Center, which is designed to provide true multi-party collaboration for secure communication, document exchange, data transfer, and automation from origination through post-closing. Prior to joining the Mortgage Cadence team, Todd Hougaard spent the last two decades holding leadership positions within the mortgage technology arena, including as founder of BeesPath Inc. and Ingeo Systems and in sales operations at First American. He is an active member of the American Land Title Association, serves on the Technology Committee, and is currently an at-large member of the ALTA Title Action Network. Todd holds a B.S. in Geography from Utah State University.

Don’t Fear HMDA

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Here we go again. The industry just got over the pain of complying with TRID and now the CFPB is at it again. This time the changes will come for HMDA.

“The new HMDA reports will add significant costs and regulatory burdens to lenders, especially in the short run when lenders are becoming acclimated to the new reporting requirements,” noted Marisa Calderon, Executive Director of the National Association of Hispanic Real Estate Professionals (NAHREP). While the challenges and expenses will be similar to TRID, the richer HMDA data set will allow lenders to analyze their peers, their peers’ and their own lending patterns, and the communities they serve. The data analysis on a richer HMDA data set could help lenders uncover unmet needs and create new and better lending programs tailored to the needs of these communities.”

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Calderon is an 18-year veteran of the financial services and housing industry. She takes a direct role in the association’s conference and event planning efforts, including NAHREP’s Housing Policy and Hispanic Lending Conference in Washington, D.C. and the association’s marquee event, the National Convention and Latin Music Festival. Ms. Calderon serves on the Fannie Mae Affordable Housing Advisory Council, Advisory board of Banc of California, on the board of directors of the Hispanic Wealth Project and is co-author of the association’s annual publication, The State of Hispanic Homeownership. She speaks at conferences and events regarding NAHREP’s advocacy efforts, policy positions and on general Hispanic housing trends.

“Beginning with the HMDA data collected in 2017 and submitted in 2018, the responsibility to receive and process HMDA data from lenders will transfer to the Consumer Financial Protection Bureau from the Federal Reserve Board,” Calderon pointed out. “In addition, filers will submit their HMDA data using a web interface referred to as the “HMDA Platform.” As part of the submission process, a HMDA reporter’s authorized representative has to certify to the accuracy and completeness of the data submitted.”

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On the bright side, vendors are ready to help lenders meet this challenge. For example, PROGRESS in Lending gave QuestSoft its Innovations Award for the work it has already done to ensure lender compliance. Last October, QuestSoft sent specifications to 29 loan origination software companies, and those imports are expected to come online during the first quarter of 2017. Customers can then import live data from those LOS platforms to see gaps, interact with their systems, and internally adjust their procedures. QuestSoft’s CFPB HMDA test version is also being provided well in advance of the CFPB’s schedule. Compliance RELIEF has been designed so that as error codes and other specifications are made available by the CFPB, QuestSoft will be able to incorporate them quickly and distribute updates to lenders testing their processes.

“On a granular level, HMDA will be a more smooth process to implement vs. TRID,” said Jon Johnson, Compliance Manager of Castle & Cooke Mortgage. “We were also given more time to implement HMDA and it won’t disrupt existing processes as much. Systems and people are being trained up right now.”

Johnson began working for Castle & Cooke Mortgage in 2016. Previously, he worked for the mortgage document preparation provider, IDS, where he was a project manager, compliance officer, and spokesperson for the implementation of TRID. Currently, Jon manages a team that helps with TRID, ECOA, and HMDA compliance. Jon is working on Castle & Cooke Mortgage’s new HMDA requirements implementation. Jon acquired a law degree from Arizona Summit Law School.

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“Lenders need to make sure that their systems are updated and that they are collecting the new data,” he advised. “If you have a file that you start this year, but it doesn’t close until next year we have to gather those additional data points. This is a great opportunity for lenders to look at their data and begin to make changes. We’ve seen the CFPB be a little more lenient with TRID, but in this case the CFPB has come out strong even before the new rules are in place.”

But the impact of these HMDA changes can be far reaching, according to Michael Vitali, Senior Vice President of Compliance at LoanLogics. ”HMDA is cumulative whereas TRID is loan by loan. Before cell phones and cameras, investigators had to do much worse, but today everything is instantaneously available. HMDA is like the cell phone. It’s now all out there for regulators to see much easier. The good side is that if a lender uses all this new data they can look at their portfolio in advance and make adjustments.”

At LoanLogics Vitali monitors regulatory developments and their practical implications for lenders, servicers and vendors in order to support Executive Management in high-level strategic decision-making. This includes identifying new market opportunities and new product enhancements. He supports the company’s Compliance Analysts on a day-to-day basis, including reviewing and approving the scope and substance of compliance reviews, answering loan-level questions, and participating in the preparation for, and defense of, regulatory exams of our clients.

His duties also include the research, interpretation and conveyance of proposed legislation related to the industry to recommend policy and/or procedure changes to maintain continued compliance with all applicable laws, rules, and regulations, investor requirements, and standard mortgage practices. “The main thing in 2017 for lenders to do will be preparation,” he said. “This business is very production geared. With refis drying up they may be focused there and not pay too much attention to this. That would be a mistake. You can’t wait until 2018 to make sure that everything is collected. The LOs also need to be trained.”

As we all know, the CFPB fined Nationstar $1.75 million for “consistently failing to report accurate data” about mortgage transactions from 2012 through 2014. It was the largest HMDA penalty ever imposed by the CFPB. This is what is to come for lenders that are not ready.

“Lenders need to do this right,” warned Vitali. “The fine was not discrimination, it was for mistakes. I look at it this way: Nobody ever took HMDA data seriously, but they will now. Technology will help lenders identify risk. Lenders will have an opportunity to look in the mirror to see if they like what they see. If they don’t like what they see they can go get a haircut or a shave to look better. The major drawback is that lenders tend to rely too much on the technology without evaluating their own processes and data.”

“The upside is that it will expand homeownership to classes of people that have been disenfranchised,” added Dr. Rick Roque, President and Founder of MENLO, a firm that advises mortgage lenders on their M&A strategies. “The largest growing homeowners are women and immigrants. The HMDA data will provide more insight into who lenders are providing financing to and why. If I’m a local lender in Miami beech and my usual borrower earns $500,000 or more, that data is going to be very homogenized, which might open you up to litigation if that borrower is not representative of the majority of borrowers in your area. So, lenders that may be under capitalized may have difficulties.”

This is where automation comes in. “Technology offers visibility,” notes Roque. “Most lenders want to do the right thing, but they are not aware of how homogeneous their consumer base is. Lenders that are behind the eight ball now are going to be screwed in 2018.”

Johnson at Castle & Cooke Mortgage notes that lenders need to customize the technology. “Lenders need to be able to build reports off of the data points so you can see patterns. Also, you have to compare the data in all of your systems so it’s the same. The data in your LOS has to match the data on your docs, for example. Lenders can do this if they prepare.”

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.

The Old Doc Prep Roadmap Is Obsolete

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As a lender, we believe your focus is, increasingly, on generating and maintaining a profitable origination business in this volatile market. Constantly worrying about the enormous and ever-changing regulatory landscape can be an unwelcome interruption. Your burden is too great, and the risk is too high, to rely solely on internal staff, or outdated doc prep, to provide legally defensible compliance in the origination process.

As regulatory pressures mount, there is an immediate and compelling need to re-evaluate and update your institution’s capacity to continuously analyze and competently implement mandated changes. This impacts your ability to produce compliant disclosures and documents for all your lending needs.

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As a lender, document preparation is always a major concern. The smallest error or omission can lead to:

>>Regulatory Fines & Damage Settlements. Failure to prepare documents in a way that aligns with both local and federal regulatory requirements can result in fines from regulators as well as class-action lawsuits from borrowers. These fines could drain millions of dollars from a lender’s cash flow.
>>Reputation Damage. The inevitable negative press that accompanies any kind of lending violation could impact the lender’s public reputation. The specific effects of such a blow to a lender’s reputation will vary from case to case but could result in lost loan origination opportunities or drive away potential business partners.
>>Restrictions on Lending Operations. Some lenders may face official restrictions on their lending operations as a result of a regulatory compliance violation.

What Should a Compliant Document Solution Roadmap Include?

The ideal solution must include compliance and legal guidance, dynamic document technology, and industry expertise, to help you navigate these challenging market conditions.

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To be more specific, the ideal compliant document solution mitigates your risk and provides you with a competitive advantage by delivering:

Total Residential Loan Program Coverage

One major problem is that most doc vendors specialize only in a few document types or in one region—forcing lenders to retain multiple vendors to cover all of their verticals & markets.

The ideal solution provides a 360º solution beginning with initial disclosure and ending with post-closing services while encompassing everything in between. With this total coverage, lenders can simplify their processes because they no longer need to seek out multiple providers.

Specialization in a Wide-Ranging Product Mix

Using a special team of lawyers with long careers in the home lending industry, the ideal solution offers expertise in numerous specialty products (or common products with unique characteristics) such as:

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>>Texas Residential Loan Documents – Texas is unique in the nation because it requires home loan closing documents to be prepared by a Texas licensed attorney. The ideal solution has a team of Texas licensed attorneys who prepare all Texas document sets more efficiently than the competition and in perfect compliance.
>>One-Time Close Construction to Perm Loan Documents – The ideal provider works with lenders to customize their one-time close documents to fit their specific construction-lending program.
>>HELOCs – Each lender configures their HELOC program differently and the ideal provider can work with any lender to customize their document solution to adhere to their unique program. Many doc prep providers are unable to customize their HELOC documents.
>>Post-Closing documents– The ideal solution provides documents for loan assumptions, loan modifications, lien releases and FHA and USDA partial claim mortgages.
>>Complex characteristics – The ideal solution specializes in the unique and complex where other vendors cannot. For example, the ideal solution can provide documents for loans where the borrowers are a double trust.

This ability to focus on specialty products that other doc prep vendors often don’t carry helps provide complete compliance for lenders in different markets and verticals, while maintaining overall disclosure and document uniformity across the lender’s entire product mix.

Built-In Compliance Checks

The ideal solution runs compliance checks of each and every closing package it produces to ensure it is in compliance with the requisite federal and state regulations. These checks include (but are not limited to):

>>TRID

>>QM

>>HOEPA

>>State Consumer Credit Laws

The ideal provider creates, manages, and integrates these checks internally—many vendors have to run these checks through an additional, outsourced product such as Mavent, Compliance Analyzer, or Pred Protect.

The ideal provider is confident enough in this internal compliance system to warrant the accuracy of its calculations, disclosures, and document packages (and to back these warranties with $10 million in E&O insurance).

Seamless Loan Origination System Integrations

The ideal solution is integrated with the majority of the largest Loan Origination Systems (LOS) on the market and can integrate with any LOS provider.

No Redraw Fees

When a loan officer orders a closing package, there’s often a need to order another closing package a little later (usually because of user error or last minute adjustments) to complete the closing. On average, a lender will order about 2.5 closing packages per closing.

Most doc prep vendors charge a fee for ordering an additional closing package. This inflates the cost of each closing and, worse yet, these redraw fees cannot be passed on to the consumer. Lenders have to eat the redraw fees of most doc prep vendors out of their own pocket.

However, the ideal provider does not charge for redraws, so lenders are only charged once for a closing. This saves expenses and removes an element of stress from the process.

Not All Document Solutions and Vendors Are Created Equal

MRG Docs is our powerful platform for the dynamic creation and seamless delivery of perfectly accurate residential mortgage documents. Our disclosure, closing document and servicing document solutions combine years of real estate law experience and in-depth regulatory insights with state-of-the-art technology to competently document mortgage transactions. Each document package is delivered with a series of built-in checks to guarantee compliance with applicable state and federal regulation.

MRG’s team of attorneys and mortgage experts recognize the business imperative of proactively monitoring and continuously analyzing regulatory changes, trends, and impending regulations that impact your business. Our team of attorneys is constantly on alert for changes from all federal, state, local, and investor requirements to provide you with up-to-date compliance from a source you can trust.

About The Author

Michael L. Riddle
Michael L. Riddle is the managing director of Mortgage Resources Group, LLC., responsible for the overall operations of the firm. He guides the teams within the firm that develop and deliver “best in class” compliant disclosure and documentation systems to single family mortgage lenders throughout the country. Mr. Riddle is the co-founder and managing partner of the Middleberg Riddle Group, one of America’s preeminent mortgage banking law firms and, in that role, has spent much of his 40 plus year professional career providing advice and legal counsel concerning regulatory compliance, enforcement and litigation to clients including banks, mortgage lenders, insurers and related financial service entities.

The Impact Of Mobile Technology

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William Mills Agency has released its 14th annual financial services industry research report, Bankers As Buyers 2017. Key trends in this year’s report include the continued evolution of payments technology, increased adoption of self-service and innovative branch automation technology, and further enhancements to mobile banking – all converging as part of an overlying strategy to improve the customer experience.

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Leading industry analysts, consultants, bankers and financial technology professionals share commentary as well as insights on trends for the year. The report also includes research and articles about what technology, solutions and services U.S. bankers will likely purchase in 2017. Some findings include:

>>Jimmy Sawyers, co-founder of Sawyers & Jacobs LLC predicts that social media will become commoditized in 2017 and that Twitter will peak, then slowly die in 2020;

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>>Ron Shevlin, director of research at Cornerstone Advisors, shared that they are expecting to see a renewed focus on CRM systems, which have been largely ignored by financial institutions over the last several years;

>>One-third of consumers surveyed recently by NTT Data expect mobile money to dominate payments within the decade; and

>>According to the Safe Systems’ 2017 Community Bank Information Technology Outlook Study, more than 80% of survey respondents have been affected by debit card fraud and email phishing attempts in the last 18 months, and due to these threats, more than 77% increased their IT security spending in the last 18 months.

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“While investments in financial technology and fintech companies remain strong, it’s clear that in 2017 the industry will encounter change in where financial institutions are spending their money,” said Scott Mills, APR, president of William Mills Agency. “What we are seeing is that the quality of the customer experience is top-of-mind for bankers and vendors alike. Having technology that enables employees to better serve customers and having the right people and business partners in place is key to a meaningful digital transformation.”

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Progress In Lending
The Place For Thought Leaders And Visionaries

“Preconfigured” Technology Delivers

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In today’s highly competitive and rapidly changing mortgage market, lenders are forced to deal with ever-increasing costs to originate loans and constantly changing regulations, which add to the mountains of paper that need to be processed. To stay competitive in this market, lenders must find ways to maximize operational efficiencies.

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One way for lenders to maximize operational efficiencies is to automate their document-driven business processes. But the challenge is that, historically, the process of implementing document management technology has been labor intensive, costly and time consuming. Lenders of all sizes can now deploy document management solutions within weeks by harnessing best practices from lender deployments across the country and eliminate duplicate and labor-intensive activities.

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Traditional document management technology implementations are often costly and time consuming, because the technology requires configuration and customization by each lender. However, by selecting an experienced document management technology provider, lenders can overcome these challenges by utilizing a preconfigured methodology that focuses on rapid deployment with immediate operational efficiency gains and ROI throughout the loan lifecycle.

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This preconfigured methodology ensures that each lender’s deployment is swifter and more streamlined, unlike traditional roll outs.  By leveraging preconfigured document management software, lenders can quickly automate business processes throughout every step of the mortgage lending process while supporting retail, wholesale and correspondent lending operations.

The combination of a preconfigured methodology with advanced technology significantly reduces the cycle time from origination to closing. As a result, lenders will gain increases in production and operational efficiencies resulting in better service levels. These better service levels improve customer satisfaction, attract and retain talented operations teams and grow realtor and builder relationships.

Deployment of the preconfigured document management solution simplifies document review, collaboration and condition management throughout the loan lifecycle. Because lenders are not starting with a blank canvas, they can quickly focus their attention on configuring the presentation of documents to different groups of users within their operations to optimize document retrieval, viewing and approval.

With traditional document management implementations, the burden of creating and managing electronic loan delivery profiles has been placed squarely on the lender. By utilizing the preconfigured implementation methodology, this major pain point is eliminated. Lenders can immediately deploy one-click electronic loan delivery that improves secondary market execution and significantly minimizes suspense issues and lock expiration penalties.

Lenders that implement preconfigured document management methodologies can readily turn their focus to leveraging additional capabilities that further optimize their operations including: automated document recognition and indexing using optical character recognition (OCR), rule-based workflow and tasking, customizable web portals for third party originators and borrowers and deeper integrations with other technology partners.

When done right, preconfigured document management technology is designed to reduce lenders’ dependency on paper, generate greater operational efficiency, increase productivity, facilitate collaboration and improve customer and staff satisfaction.

“Our previous document management provider notified us that they were sunsetting their product. Due to our growth and other high priority projects, our staff had limited time and/or resources to implement a new document management solution in time for our busy spring home buying season,” said Jill Quinn, executive vice president of operations at Philadelphia Mortgage Advisors. “We selected VirPack for their experience, advanced technology and preconfigured methodologies based on best practices that enabled us to gain immediate ROI and provided operational efficiency with the goal of closing more loans with existing staff.”

About The Author

Kelli Himebaugh
Kelli Himebaugh is a member of the Executive Team at PROGRESS in Lending and is National Account Executive at VirPack, a leading provider of document management and delivery technology to the mortgage banking and financial services industries. She is also a member of the Executive Team at PROGRESS in Lending Association. Kelli is a proven sales leader with more than 20 years of housing finance experience and 10 years of mortgage technology experience. Kelli can be reached at kelli.himebaugh@virpack.com.

Communicating Like Never Before

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In PR and communications, we’ve faced a familiar challenge for quite some time. Sometimes, we do the usual: send a few press releases, do some media outreach, pat ourselves on the back and do it again tomorrow. But for a long time, our industry has needed evolution. We do the same thing, and yield the same thing – yet wonder why we don’t earn more budget or praise.

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When we talk about evolution, sure: tools, technology and breaking down silos have been the key to many industries taking the step to greater value within their organizations. But, there are often more simple, overlooked steps we can take to communicate faster, more effectively and enact more change than public relations has ever been able to before. At the Cision World Tour stop in San Francisco, Altimeter principal analyst and visionary Brian Solis shared some of his research based tactics for being positive change agents in our industry:

1) ROI doesn’t always have to mean Return on Investment. In fact, it can mean Return on Ignorance.

The risk of remaining stagnant might not be that daunting for some, but let’s put it into perspective: would you rather do the same old things and produce the same old results, or implement new things and be able to demonstrate new, exciting and meaningful results? It’s not always easy to break out of the mold and get approval to experiment and try new things or A/B test, but done right, these learning experiences can garner valuable takeaways for brands and inform future strategy.

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2) More mindfulness, less strategy.

This tenet may seem counterintuitive, as strategy is a term thrown around a staggering amount of times daily by brands, but at its core, it’s about keeping the audience and end-user in mind first, rather than the other way around. Cision CMO Chris Lynch echoes a similar sentiment – consumers should dictate influencer and outreach strategies, so that we’re communicating the right message at the right time to the right audiences.

3) Success lies in how we use technology to see around the corner and fundamentally change.

Adopting new technologies is essential to brand evolution, but it’s not always about chasing the shiny object and spreading yourself thin across tools or platforms. Having the foresight to evaluate the implications of technology and the big picture, long-term effects can help advise you on where to where to spend your time and money to ensure you’re getting the most out of new tech.

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4) Brands shouldn’t leave experiences to chance – experiences should be designed.

Just because User Experience (UX) isn’t necessarily the “duty” of the communications team doesn’t mean that PR can’t contribute. So how can we be a part of it? There are many ways: provide great customer experience on social media no matter whether a customer is having a great experience or not, engineer an influencer experience that immerses key audiences into your brand via an activation or content, or utilize data to refine strategy across your team. Like #2, keeping the consumer at the forefront of your planning does more benefit to your brand than harm.

5) Be truthful. Be engaging. Be proactive. Be human.

During our “Creating a win-win relationship with the media” panel, a recurring theme from brand leaders from Adobe, Kimpton Hotels and Evite were these simple rules. Transparency, focusing on more than just engaging and being more than just an auto response can foster an emotional connection with a brand that has been proven to be a significant amplifier when someone considers a purchase. Can comms drive this? Absolutely.

In essence, what’s old is new again in the communications industry, and the basic principles we were taught still remain: public relations is about people and relationships, and without this foundation, many comms practitioners fail. Once this philosophy is part of the equation in everything that we do, we can then layer on the tools and technology to knock it out of the park.

About The Author

Stacey Miller
Stacey Miller is the director, communications at Cision. During her ten years with the company, she has pioneered influencer marketing, employee advocacy and social selling programs through both traditional and social media. An internationally sought keynote speaker, her writing has appeared in Forbes, CIO and VentureBeat, as well over 500 authored blogs. Stacey is frequently quoted in online publications as well as published books, including several college textbooks. Consistently mentioned in “top people to follow” and “up and coming pros” lists, Oracle named Stacey a finalist for its Community Manager of the Year Award in 2012.