Decrease Your Loan Fallout

There are several market conditions at play that make it harder for lenders to reduce their fallout, but it doesn’t have to be that way. Get Credit Healthy is a leading Fintech company that provides an award-winning technology platform that delivers a proven methodology to maximize business opportunities for Lenders, Financial Advisors, Municipalities and Consumers. At Get Credit Healthy the company’s highly skilled staff of business opportunity experts help create millions in new loan opportunities for lender partners. Get Credit Healthy is a disruptive and award winning platform that transforms a currently untapped market into a well-qualified, well-informed applicant pool that desires and more importantly, qualifies for the financial products offered in the market today.

Get Credit Healthy is an organization that provides consumers with the tools and resources they need to eliminate debt, build credit, and make sound financial decisions. Unlike similar companies that only treat symptoms, Get Credit Healthy operates under the philosophy that the only way to break individual and systemic cycles of poverty is to treat root causes of financial difficulties. The company believes that the only way to truly help consumers become financially healthy is to educate and change their behavioral and mental approach to their financial health.

Get Credit Healthy allows consumers to physically see how their decisions and actions impact their financial well-being, while also providing a practical education. In addition to coaching, the consumer also has access to a plethora of resources such as webinars, live telephonic sessions with credit specialists, and interactive educational materials. The company’s CEO Elizabeth Karwowski discussed how she sees the mortgage market evolving here…


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Q: Today’s housing market is drastically different from the market of just 10 years ago. In your opinion, what are some of the biggest challenges that lenders are facing today?

ELIZABETH KARWOWSKI:That’s a great question because you can’t really begin to formulate and fine-tune business strategies until you are able to understand difficulties common to most lenders in today’s market. Business development has always been a challenge; if it was easy, everyone could do it. However, it is becoming much harder to generate quality leads. Every day we are seeing a greater shift from a refinance market to a purchase market. Many loan officers who are accustomed to generating new streams of revenue, in house, are now having to start from scratch when trying to attract new sources of business. Lenders are being forced to devote more time and resources, pecuniary and otherwise, to lead generation. Another major concern for many of the loan officers is the rising cost of lead acquisition. Quality leads are becoming harder and harder to come by, and the demand is driving the price up. When you couple this extra cost with another major problem, the lack of qualified applicants, the cost of origination increases such that it has become a barrier to entry for fledgling companies looking to establish a foothold in the contemporary marketplace.

Q:You raised some very interesting points, especially with regard to the shift to a purchase market. Could you expand a little more on why that shift is so significant to lenders?

ELIZABETH KARWOWSKI:Of course. It’s always easier to generate business from sources or people with which you or your organization has established a relationship or rapport. Logic would also dictate that a consumer with which your organization had a successful, prior business relationship has a higher percentage chance qualifying for the financial products that you’re offering than someone else chosen at random. What we are seeing now, is that many lenders must, increasingly, rely on third party sources for leads that are often proving to be of lower quality. I think this can be attributed to the changing paradigm regarding home ownership. What used to be known as the “American Dream” of owning your own home, no longer resonates with the younger generation which, traditionally, would have made home ownership a top priority. Many of the potential first time home buyers who are applying for mortgages are at a stage later in life where previous financial difficulties and low credit prevented them from purchasing a home. Some of these people were able to overcome those financial hurdles, but many are not equipped with the resources or financial IQ to put themselves in position to qualify for a mortgage. Lenders are becoming frustrated because the applicants that are willing do not qualify, and those consumers who do qualify are not willing.


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Q: That makes a lot of sense, and it’s unfortunate that younger generations do not place more value on home ownership. You did mention, however, that there are many consumers who still want to buy, but are not qualified. How does this affect the cost of lead acquisition?

ELIZABETH KARWOWSKI:Well, in this industry, credit scores that fall outside of qualifying ranges are one of the common challenges to the successful conversion of leads. Leads that look attractive because the applicant has decent income or other assets, are all too often coupled with disqualifying credit scores. According to the Federal Reserve Bank of New York, more than one-third of all Americans have a FICO score of 620 or below. 

That number is staggeringly large, and has huge implications in terms of price per lead and the cost of origination. Many institutions are spending thousands of dollars, and in some cases tens of thousands of dollars, on leads every month. If one third of those leads have less than qualifying credit, then lenders have essentially payed 33 percent more than initially thought for the applicants who do have a qualifying score, with no guarantee they’ll otherwise qualify or ultimately opt for the product for which they applied. 

In an effort to remedy this problem, lenders have begun forming strategic partnerships with organizations that specialize in credit remediation and that are able to rehabilitate consumers’ credit profiles in order to get them qualified. These organizations often offer their services at no cost to the lenders, and provide an avenue through which those lenders are able to recapture leads that would have otherwise fallen by the wayside. This strategy allows lenders to drive the price per qualified lead, and overall cost of origination, down by providing a larger qualified applicant pool for the loan officers to work with. 

Q:That is an interesting statistic; I would not have guessed that many people are affected by poor credit. What are your thoughts on consumer credit health at a macro level?

ELIZABETH KARWOWSKI:Well, it is nowhere near as healthy as it could be. Although we are all aware of the credit system and how big of a role it plays in our daily lives, very few of us possess a critical understanding necessary to successfully navigate the credit landscape. Most people, through no fault of their own, simply lack the tools required for self-help. As I previously mentioned, 33 percent of all consumers have a score below 620, but what is even more alarming is that a study conducted by the Consumer Financial Protection Bureau revealed that over 45 million adults either do not have a credit score or are un-scorable. Think about that for a second. There are 300 million people in this country (that includes children), and 15 percent of them do not have a credit score. Those two statistics, alone, should be sufficiently indicative of the difficulties faced by lenders in today’s market.

To compound the problem, the reactionary measures taken by governmental bodies and financial institutions, themselves, after the 2008 recession have increased the grade of what was already an uphill battle for loan officers. In some cases, increased regulation was warranted but, in many others, consumers who would have qualified in the past because they were able to demonstrate that they had the means to meet their financial obligations are denied every day, irrespective of their actual ability to pay back those loans. This is because credit scores are now weighed so heavily. 

So, to answer your question, I think there is certainly room for improvement. Many of those Americans who find themselves in less than ideal circumstances as they pertain to credit lack the resources and tools necessary to improve their standing. With a little guidance, those consumers could take the remedial measures necessary to qualify for a mortgage or reach their other financial goals. 


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Q:Well what types of resources or tools do those consumers need? If those consumers are able to improve their credit health, I’m sure it could create a lot of opportunity for lenders.

ELIZABETH KARWOWSKI:You’re absolutely right. That pool of unqualified applicants represents a wealth of potential business for lenders. The bottom line is that the credit system in this country, in terms of what decisions impact your credit both, positively and negatively, can be very difficult to comprehend for most people. The emphasis that is placed on consumer credit scores during the evaluation process is often what determines whether or not an applicant will be pre-approved. From personal experience, I have seen successful businessmen and women, with high paying jobs, denied for a mortgage because their credit was a mess. They could have easily afforded the payments on the mortgages for which they applied, but were denied solely because of their credit profiles. The reason I bring this up is to emphasize that credit is not just a problem for the impoverished, it affects all people of all socioeconomic classes, from all walks of life. 

The good news is that credit coaching and education can go a long way in helping those consumers rehabilitate their credit. The methods by which credit bureaus calculate credit scores are often counterintuitive and, without the proper guidance, many people unwittingly wind up hurting their scores when they attempt to improve them independently. An example that I like to use, and what I encounter constantly, is when a consumer tries to raise his or her credit score by paying off a delinquent account. Let’s say that there is a delinquent account on your credit report that has been there for several years. It’s perfectly rational to think that if you pay that debt off, you would raise your credit score; you owe someone money, you pay it, so your score should go up because you’re no longer indebted to that creditor. However, paying off that account, which has been dormant for several years, can have an absolutely devastating effect on your credit score. By making a payment, you essentially “reset the clock” on that debt and, in doing so, can drop your credit score anywhere between 50-100 points. 

Credit is analogous to fields like law or finance. If you’re not a lawyer or an accountant, you wouldn’t litigate a complex business case or perform a financial audit on your own company. Well, the same holds true for credit. In order for a consumer to improve his or her credit profile and credit score, he or she should engage a professional who is well versed in the field, and who is capable of accurately assessing a credit profile, and providing solutions that will actually result in positive changes to that profile. 

Q:Well if consumers shouldn’t be attempting to fix their own credit, is there anything lenders could do to help?

ELIZABETH KARWOWSKI:Of course. Lenders are uniquely positioned to help their prospective clients. Through their interaction with an applicant, a lender learns about that applicants’ goals, which products will allow that applicant to reach those goals, and what that applicant needs to become qualified for those products. As I mentioned before, if the lenders are able to form partnerships with organizations that specialize in this type of credit rehabilitation, they could steer their potential clients toward the guidance and resources needed to help that applicant become qualified for the lender’s financial products. Several of these organizations are not-for-profit and were established to help consumers, but lenders are quickly becoming indirect beneficiaries.  

Q: You’ve brought up these partnerships with credit remediation companies several times, but is there any reason that the lenders cannot help their applicants, themselves?

ELIZABETH KARWOWSKI:That’s a great question, and the answer is that there are several reasons that lenders should be weary of assisting consumers in-house. The most obvious reason that comes to mind is that most lenders would find themselves in violation of federal law, specifically, the Credit Repair Organizations Act, or CROA for short, if they began helping these consumers fix their scores in-house. 

CROA is a law that was promulgated to regulate the credit repair industry and sets forth requirements by which credit repair organizations must abide when performing credit repair services. When I bring this up to lenders, I usually get “but this is not a credit repair company” as a response. The issue is that by definition, any organization that provides advice to consumers about how to improve their credit, and stands to gain, financially, as a result of providing that advice is a “credit repair organization” under the law. What this means, in practical terms, is that if a loan officer provides advice to an applicant about how that applicant could raise his or her credit score in order to qualify for a loan, that advice, no matter how well-intentioned, could result in that company being classified as a credit repair organization. If that happened, that lender would then be required to meet all requirements under the law and could potentially be subject to unwanted and unintended liability, including lawsuits from both, consumers and the CFPB. 

Lenders may also lose their ability to pull credit as another unintended consequence of performing these services in-house. Many providers of independent verification services explicitly prohibit those businesses to which they provide services from engaging in credit repair. Because these types of prohibitions are commonplace across the industry, lenders could very likely run afoul of these covenants, which would obviously have devastating consequences.

Finally, by partnering with organizations that specialize in this field, lenders are able to free up time, money, and resources for business development and other areas of need. If those non-profits are providing services to consumers at no cost to lender, then it doesn’t make much sense for lenders to undertake this task themselves, especially in light of the aforementioned potential consequences that we just discussed. 

Q: If lenders are interested in forming these types of partnerships that you discussed, what are some attributes that they should look for in a potential partner?

ELIZABETH KARWOWSKI:First and foremost, lenders should do their homework to ensure that they only select organizations that have a proven track record and are actually capable of providing consumers the competent assistance that they need. Any partner should not only provide credit remediation services, it should be a full-service company that provides consumers with a wealth of resources such as credit education and one on one guidance to help ensure a successful outcome for the referred consumers. 

Lenders should also ensure that there are mechanisms in place so that the lender is able to monitor referrals’ progress. Everything should be measured to track results.  This will also allow the lender to keep in contact with the referral throughout the remediation process, and will make it easier for the lender to recapture the leads that they’ve referred once that lead reaches his or her goal and becomes qualified for the desired product. 

INSIDER PROFILE

Elizabeth Karwowski is the CEO of Get Credit Healthy, a technology company that has developed a proprietary process and solution, which seamlessly integrates with the lenders’ loan origination software (LOS) and customer relationship management software (CRM) in order to create new loan opportunity and recapture leads. Get Credit Healthy helped their partners create over $200M of new loan opportunities in 2017 alone, and plan on continued growth in 2018. As a recognized credit expert, Elizabeth has been featured on NBC and Fox News, and published in a number of financial industry publications.

INDUSTRY PREDICTIONS

Elizabeth Karwowski thinks:

1. Competition is not going away in the mortgage industry. Lenders will continue to see rising cost to acquire leads causing margin compression.

2. The large amount of information on credit is not shrinking, it’s just making it even more confusing. Did you know some credit score models now go to 990? What happened to 850? Consumers are overwhelmed. We have not made the process to educate consumers EASY, digital, or interact.

3. Lenders will continue to spend large amounts of money to meet their CRA (Community Reinvestment Act) requirements if they don’t change the way they do things. Need to leverage technology and find ways to tap into different pool of people without spending a fortune.

Looking At OCR Use Cases In Mortgage Lending

With the costs to process each mortgage continuing to rise, lenders must leverage automation to improve profitability and consistency in their business processes.  With the right Advanced Mortgage OCR solution, mortgage companies have been able to reduce their level of manual document indexing and data entry activity, enabling them to process more loans per day at a lower cost per loan – yielding a leaner process and increased profit margins. 

Advanced OCR, More Than Just Reading Characters

An Advanced Mortgage OCR solution needs to do more than just convert document images to text.  Once converted, an advanced OCR solution should then be able to interpret that text using Semantic Analysis and artificial intelligence (“AI”) rules engines in a similar way a human being would process the content. Based on these results, documents can be automatically indexed and relevant datapoints extracted.  This information is then passed to downstream applications for appropriate routing, and archival. 


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A Technology Vendor with a Unique Approach

For today’s most advanced OCR solution, the OCR process begins with a full-page OCR scan of each image.  This step is unique and typically completed in less than one second per page.  An extremely high-speed OCR process is critical and yet difficult for many vendors to achieve.  It is this performance, which allows every word on the page to be included in the scope of the AI rules engine analysis, just as a human being would interpret the content.  This content evaluation process is unique in terms of the combination of speed and ability to include allpage content in the evaluation scope, thereby making it extremely flexible with documents of varying layout (for example, bank statements).  

OCR in Action Use Cases from Leading Lenders

>>TRID Capture and Audit

The ideal OCR solution provides a rigorous tool for a comprehensive review of each TRID transaction. Typically, during the origination process there are several iterations of both a Loan Estimate and a Closing Disclosure. The most efficient TRID Audit solution is able to extract every data element from all initial and re-disclosed Loan Estimates and Closing Disclosures. The system can be configured to either output all of the data from each document iteration, or output just the differences found from the prior document. Output formats should include MISMO v3.3 or custom XML schemas. 


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In the case where a loan origination system is generating the TRID disclosures, this differential reporting may be something produced by the LOS itself. However, in the correspondent lending channel, or in the case of a split, “borrower-only” and “seller-only” Closing Disclosure transaction, this Advanced OCR solution closes a gap that the LOS is unable to address. 

In these cases where the lender’s LOS does not generate all iterations of the Closing Disclosure and Loan Estimate, a solution is needed that can natively read PDF or scanned TIFF versions of these documents. This type of TRID Audit solution has been developed and tested to support any layout of these documents from any source.

>>UCD Creation and Audit

The Uniform Closing Dataset (UCD) provides a common industry dataset to support the Consumer Financial Protection Bureau’s (CFPB) Closing Disclosure and its ability to be communicated electronically. 

Loans closed on or after September 25, 2017 which are acquired by the  GSEs are required to have both a UCD XML file and after June 25, 2018 an embedded PDF of the associated Borrower Closing Disclosure. 

Over time the UCD is intended to provide the following benefits:


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A. Greater data consistency by promoting better and more efficient data integration and exchange between business partners.

B. A common understanding, as all parties use a consistent approach and language to describe the information on the Closing Disclosure.

C. Improved data accuracy by eliminating the need for proprietary formats that can be costly to maintain and can lead to misinterpretation of the data.

The GSEs are collecting UCD data because it:

A. Helps enhance credit risk management with more data and better quality data.

B. Provides important information to help increase their ability to detect fraud and misrepresentation at loan delivery.

C. Provides additional transparency into the mortgage loan transaction file to help assess whether the loan, as closed, meets the GSE’s eligibility requirements.


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According to the GSEs a PDF of the Closing Disclosure needs to be embedded in the UCD because, “The Borrower Closing Disclosure is the definitive record of the fees, charges, and adjustments that occurred in the loan transaction. As such, it is used to validate that the information provided in the UCD submission is complete and accurate.”

July 2018 UPDATE: As the new requirement for embedding a PDF of the Borrower’s Closing Disclosure was beginning to rollout, leading solution providers engineered a solution to perform an audit to statistically measure the accuracy between the data found on the embedded PDF and the MISMO XML data found in the UCD.  

The right solution provides the tools to determine if the data on the embedded PDF Closing Disclosure source document actually matches the same data within the UCD XML file. While this capability is certainly valuable to GSE entities, it is also possible to use this audit for other loan transfers.  As part of a due diligence process, investors may use this capability to verify that a set of loans to be purchased is as advertised and all critical metadata provided is accurate.

>>HMDA Audit

In order to promote compliance with federal consumer protection laws, lenders are required to submit certain borrower demographic data to the federal government. HMDA (Home Mortgage Disclosure Act) disclosures provide the public with information on the home mortgage lending activities of most lenders.

One of the challenges for a lender in reporting HMDA data is to ensure that the documents from which data is pulled are, in fact, the final versions. Many times errors in HMDA reporting are due to reporting data based on a non-final source document.

The most advanced OCR solution for HMDA Audits searches through an image archive for every version of every document relevant to the HMDA reporting process and automatically determines the final versions. Data is then automatically captured from these final documents via their AI data extraction rules and coalesced into an XML file or spreadsheet to be used for reporting. 

This process provides lenders with a highly automated method for assuring accuracy of required Loan Application Register (LAR) reporting data and to ensure database of record quality for future reporting needs.

What’s New in 2018?

>>OnDemand OCR capture (W2s, Paystubs, and Tax forms)

As the industry continues to look for faster and more efficient ways to capture key data from prospective borrowers, a leading OCR provider has been listening.  Their sub-second speed OCR is the ideal technology platform from which to allow borrowers, loan officers and others to submit supporting loan documentation for quick automated document identification and data field capture.

A user may drag a PDF of their Federal IRS 1040 Income Tax form to a browser-based app, the form will be identified and all data fields captured in a short time frame and immediately available to loan officers and loan origination systems.

>>Necessary but Unique Capabilities

The key capabilities and features of the Paradatec Advanced OCR solution that make these use cases possible are:

A. Sub-second per image full OCR processing

Paradatec advanced indexing and data capture technology is at least 10 times faster than others, which allows them to take an approach others would like to, but just can’t because of their system performance. This capability is unique, and enables Paradatec to evaluate all text on every page, just as a human can but much faster. 

B. Extreme scalability with a small hardware footprint 

Paradatec’s Advanced OCR solution scales from the ability to process over 1,000,000 images daily on a single eight core server to tens of millions of images daily by simply enlisting additional cores into the configuration.

C. Pre-built mortgage OCR library

Over 500 mortgage document types ready to be indexed, and more than 6,000 mortgage loan data fields able to be captured right “out of the box”.  

D. Web services API

Paradatec’s OnDemand OCR feature extends their Advanced OCR capabilities to other applications through seamless integration with a web services API.

E. Document versioning

Documents can be stacked, with like documents consolidated together, to streamline the document versioning process.

F. Bookmarked PDF output

Paradatec’s WritePDF module provides a bookmarked and annotated PDF of the submitted loan package, including a table of contents with links to key data elements within the package.  Clients find this feature invaluable and a significant documentation addition to their inventories of mortgage loans.

Paradatec’s Advanced Mortgage OCR solutionis designed to make mortgage lending faster and more accurate.   In 2017, Paradatec’s Mortgage OCR solution processed over 1,500,000,000 images (representing over 2,500,000 loans), helping lenders and servicers streamline their origination, onboarding and compliance obligations by automating document indexing, automating data extraction, meeting tighter service level agreements, and delivering more accurate data much faster than manual data entry alone. In 2018, Paradatec is on track to again exceed the volumes processed and the automation provided to their lender, servicer, and other technology provider clients in the mortgage lending industry.

About The Author

Your Hero To The Margin Compression Villain

It is said that every hero needs a villain. As a lender it is very easy to identify the villain in today’s mortgage market—declining profitability due to the rising cost to originate a loan leading to margin compression.


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As reported by Kelsey Ramierez, reporter for Housing Wire, “The Cost to Originate a Mortgage Just Got Ridiculous-Again.” She goes on to state, “The cost of originating a mortgage hit all-time highs back in 2013 and 2014, but now, those costs are up once again and much like before, hitting all-new highs.

Lenders continue to struggle in the rising mortgage rate environment, reporting negative profits for the first time since Dodd-Frank compliance brought down profits in 2014.

Back at the Mortgage Bankers Association’s National Secondary conference in New York City, MBA Chief Economist Mike Fratantoni predicted loan loan officers would report negative profits in the first quarter of 2018.


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His prediction was correct.

Independent mortgage banks and mortgage subsidiaries of chartered banks reported a net loss of $118 per loan originated in the first quarter of 2018, according to the MBA’s Quarterly Mortgage Bankers Performance report. This is down from a gain of $237 per loan in the fourth quarter of 2017.

“In the first quarter of 2018, falling volume drove net production profitability into the red for only the second time since the inception of our report in the third quarter of 2008,” said Marina Walsh, MBA vice president of industry analysis. “While production revenues per loan actually increased in the first quarter, we also reached a study-high for total production expenses at $8,957 per loan, as volume dropped.”

In this unfortunate story for lenders, while it is easy to identify the villain, who the hero in this story will be is still up for debate.  We can agree that necessity is the mother of invention and if margins were wonderful, we wouldn’t need to rethink how we originate.  But that’s not today’s reality, so we are forced to ask the tough questions in hopes of finding our hero.


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>>How do we reduce costs without the standard seasonal downsizing?

>>How do we increase origination numbers without blindly hiring more LO’s?

>>Is there a better and more efficient way to originate loans?

>>Can we afford to continue doing business as usual?

In starting to ask these tough questions we must first identify costs to see where the actual numbers are coming from.  

>>Are your numbers off and contributing to your rising costs?

>>How many loans does the average LO close a month in your organization?

>>Of those loans, how well are your LO’s growing the referral business?

>>How many loans can a processor per day, month, and year handle in your organization?

>>Ask the same question about your Underwriters? Closers? Funders? Etc.?

>>While you may have these numbers at your disposal, when was the last time you truly checked to see how accurate they are in today’s market?

>>How paperless is your organization really? How much is that costing you?

>>Why is it that the average Underwriter could handle a pipeline of 100 loans pre-crash but can’t handle much more than 30 today?

In reviewing your numbers one thing should be very clear— the villain in this story in the rising cost to originate. So as a lender we must shift our focus to the potential hero in this story if we are going to survive let alone thrive in today’s mortgage market.  The hero is improving your operational efficiency.  The challenge is how we put this into action.

When lenders originate it is typically done from a very loan centric perspective. The average mortgage company does everything from their LOS and prioritizes their loans by status/milestone/pipeline. Don’t blame the LOS, but instead consider this:

>>Is there a better way to prioritize the steps to originate a loan?

>>How can you empower LO’s to do more without them having to spend more time on tedious follow-ups?

A fresh look at the “flow of work” and not just the traditional workflow of origination to underwriting to funding is required.

The devil is in the details. It is critical that if we are going to defeat the villain, we must take the time to not only understand how much we are spending on each task to originate but also truly understand how we can become more efficient.

Lenders are notorious for running tons and tons of reports.  Unfortunately, reports become stale the minute you print them, so you forward thinking lenders have moved to real-time dashboards.  While that is a step in the right direction, that’s only half the battle. The real key is— what do you do with that data?

It is one thing to understand the data, but if you want to truly gain operational efficiency and be the hero, what you do with the data is so much more important.  Is the data telling you where the bottlenecks exist in your origination workflow?  Those bottlenecks/inefficiencies are costing you money and contributing to your rising costs. Once you identify the bottlenecks how can you eliminate these bottlenecks through workflow automation to create consistent processes that streamline and reduce costs?

Let’s take a step back and look at history. When Henry Ford implemented the assembly line, they saw a dramatic increase in productivity, here’s why:

>>Work was prioritized, pushed to the right person at the right time

>>Ford created sub-assemblies to maximize output

>>Technology then automated the items that a system could handle, but people still do a majority of the work today. It’s more of the right person, at the right time, and at the best price.

The good news is that you don’t have to try and figure all of this out by yourself.  Help is on the way.  We know the mortgage process.  A team of lenders and mortgage technologists created Lodasoft. We’ve been on your side of the fence—struggling with the day-to-day challenges of the constantly shifting mortgage process and rising cost to originate. Based on that experience, we strive to make lenders more efficient, scalable and profitable.

We can help you maximize your team by looking at things from a different perspective.  Lodasoft is a Digital Mortgage Platform focused on task and workflow automation. Designed by mortgage veterans, our strength is in maximizing productivity and quality while providing structure and guidance for all members of the process.

Consider this:you’ve been successful thus far. You’re closing loans, and you might be somewhere in the middle when it comes to profitability. Now, if you could only get the most out of every motion in that process.

The first thing we can help you do is Identify. Zooming out of the day-to-day can work wonders, especially when done by a fresh set of eyes. Here’s an example of questions you might ask in identifying key areas for improvement.

>>What is our process for gathering borrower conditions?

>>How do we actually Track, Approve, and Reject documents?

>>How much of this is done via email?

>>Do all interested parties of the transaction have a Real-time Status into each one of these conditions?

For example, say we’re waiting on an item from a third-party. Do we know how long we’ve been waiting for that particular item? Is it stopping someone else from performing an unrelated function? What does the follow-up process look like? Are we just emailing for updates? 

Once we’ve identified the key areas for improvement, you’ll have a better understanding of how you might transfer responsibilities from one employee to another. Think of it like this, a high-cost resource should almost NEVER perform a low-cost function. If it can be handled through automation, even better! 

The next thing to identify is Communication. So much gets lost due to a lack of transparency. Systems were designed so that multiple users can’t have edit rights to the same areas. It makes sense. If someone is reviewing income and someone goes in and changes the income… well…

Think about it. We all have some reporting mechanism we rely on. As mentioned earlier, some work from system pipelines, some from live dashboards. Some (maybe a majority) still use spreadsheets. 

Why? 

For one, spreadsheets can be manipulated very easily. Make a few updates, attach it to an email, and send to management. Communication is key. People need updates so that they can offer guidance and delegate loans. However, this is where things start to really fall apart.

>>What if the key person on a file is out of the office? 

>>Could that lock extension have been avoided?

As you identify these key areas that need to be communicated to multiple people, you will begin to uncover missteps that create vicious cycles of he-said/she-said. A flurry of CC and BCC emails ensue and this leads to, well…a lot of bad. 

We can help you go from “CC and BCC everyone just in case” to pointed communication at the right time to the right person. This way, your team is being communicated to/with on a “need to know” basis.

These are just a couple of examples of things we do every day that happen because they’ve always been done that way. We can change together.

You no longer have to be a victim to the rising cost of originating loans. Allow Lodasoft to help you rethink how you are originating so that you can streamline your processes while reducing the cost to originate. Let operational efficiency become the hero in your organization.

About The Author

Why Dodd-Frank Reforms Are Good For Business

On May 24, the first major financial institution bill with substantial bipartisan support in more than ten years was signed into effect by President Donald Trump. Known as The Federal Economic Growth, Regulatory Relief, and Consumer Protection Act (“Act”), it recognized that the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) must be amended. 

The passage of Dodd-Frank in 2010 – spearheaded by Congressman Barney Frank and Senator Christopher Dodd – was designed to address the 2008 financial crisis with far-reaching reforms, including the creation of the Bureau of Consumer Financial Protection (CFPB) and tighter supervision of financial markets and institutions. Prior to the CFPB, consumer regulations were the responsibility of federal agencies such as the Federal Reserve Board and the Department of Housing and Urban Development. 


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Under Dodd-Frank, community banks with limited resources and large institutions with significant legal and compliance staffs became subject to a number of new regulations issued by the CFPB. The mandatory time frames for the CFPB to issue regulations resulted in rules that were confusing and misinterpreted. Consequently, mortgage lenders provided fewer loan options to limit their liability associated with noncompliance. 

Compliance departments at large banks rapidly expanded to keep up with the increasing number of new requirements. Banks and mortgage providers located in smaller cities and towns had limited to no compliance talent pool to draw from even if they could afford the staff. To offset the rising cost of managing compliance, local community banks sought acquisitions, closed, or merged with other banks. 

What Reforms Mean For Local Mortgage Providers

The amendments include relief for community banks struggling to maintain profitability and the staffs required to implement CFPB regulations or offer new products due to uncertainty and liabilities. 


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Smaller banks are now exempt from many requirements that previously hindered growth. 

For example, finding certified or licensed appraisers in rural areas can be difficult and often those resources do not exist. Now, banks located in more rural communities are exempt from conducting appraisals of real estate property with a transaction value of less than $400,000. The lenders must also provide proof that certified or licensed appraisers are not readily available. 

For areas with high concentrations of community banks, this could mean the difference between the banks’ survival and closing. Laws and reforms move along a sliding scale. Because of the 2008 financial crisis, the scale shifted towards protecting consumers; a decade later, the lending industry hopes the reforms can find a balance between consumer protection and a thriving housing and financial economy. 

Summary of Mortgage Lending Revisions in the 2018 Dodd-Frank Reform

Although the Act addresses banks, student borrowers and capital formation, we are specifically addressing only mortgage lending revisions and improving consumer access to mortgage credit as well as protections for veterans, consumers and homeowners. 

THE FEDERAL ECONOMIC GROWTH, REGULATORY RELIEF AND CONSUMER PROTECTION ACT (“ACT”)

Truth-in-Lending Act (“TILA”)

Definitions were added to the qualified mortgage (ability to repay) provisions related to “Safe Harbor.” 

“Covered institution” is an insured depository institution or an insured credit union that, together with its affiliates, has less than $10,000,000,000 in total consolidated assets. 


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“Qualified mortgage” includes any residential mortgage loan:

>>That is originated and retained in portfolio by a covered institution; 

>>That is in compliance with the limitations with respect to prepayment penalties; 

>>That complies with any guidelines or regulations established by the CFPB relating to ratios of total monthly debt to monthly income or alternative measures of ability to pay regular expenses after payment of total monthly debt, taking into account the income levels of the borrower and such other factors as the CFPB may determine relevant and consistent with the purposes of the statute;

>>That does not have negative amortization or interest-only features; and

>>For which the covered institution considers and documents the debt, income, and financial resources of the consumer as required.

A residential mortgage loan described above will be deemed to meet the ability to repay requirements. 

A residential mortgage loan described above does not qualify for the safe harbor if the legal title to the residential mortgage loan is sold, assigned, or otherwise transferred to another person unless the residential mortgage loan is sold, assigned, or otherwise transferred:

>>To another person by reason of the bankruptcy or failure of a covered institution; 

>>To a covered institution so long as the loan is retained in portfolio by the covered institution to which the loan is sold, assigned, or otherwise transferred; 

>>Pursuant to a merger of a covered institution with another person or the acquisition of a covered institution by another person or of another person by a covered institution, so long as the loan is retained in portfolio by the person to whom the loan is sold, assigned, or otherwise transferred; or 

>>To a wholly owned subsidiary of a covered institution, provided that, after the sale, assignment, or transfer, the residential mortgage loan is considered to be an asset of the covered institution for regulatory accounting purposes.

Any loan made by an insured depository institution or an insured credit union secured by a first lien on the principal dwelling of a consumer is exempt from TILA higher priced mortgage escrow requirements if:

>>The insured depository institution or insured credit union has assets of $10,000,000,000 or less;

>>During the preceding calendar year, the insured depository institution or insured credit union and its affiliates originated 1,000 or fewer loans secured by a first lien on a principal dwelling; and

>>The creditor meets certain other criteria.

Exemption from Appraisals of Real Property Located in Rural Areas

An appraisal in connection with a federally related transaction involving real property or an interest in real property is not required if:

>>The real property or interest in real property is located in a rural area, as defined by Regulation Z; 

>>Not later than 3 days after the date on which the Closing Disclosure is given to the consumer, the mortgage originator, directly or indirectly:

A. Has contacted not fewer than three State certified appraisers or State licensed appraisers, as applicable, on the mortgage originator’s approved appraiser list in the market area; and 

B. Has documented that no State certified appraiser or State licensed appraiser, as applicable, was available within five business days beyond customary and reasonable fee and timeliness standards for comparable appraisal assignments, as documented by the mortgage originator; 

>>The transaction value is less than $400,000; and 

>>The mortgage originator is subject to oversight by a Federal financial institution’s regulatory agency.

A mortgage originator that makes a loan without an appraisal as described above may not sell, assign, or otherwise transfer legal title to the loan unless:

>>The loan is sold, assigned, or otherwise transferred to another person by reason of the bankruptcy or failure of the mortgage originator; 

>>The loan is sold, assigned, or otherwise transferred to another person regulated by a Federal financial institution’s regulatory agency, so long as the loan is retained in portfolio by the person; 

>>The sale, assignment, or transfer is pursuant to a merger of the mortgage originator with another person or the acquisition of the mortgage originator by another person or of another person by the mortgage originator; or 

>>The sale, loan, or transfer is to a wholly owned subsidiary of the mortgage originator, provided that, after the sale, assignment, or transfer, the loan is considered to be an asset of the mortgage originator for regulatory accounting purposes. 

A rural loan may not be made without an appraisal if:

>>A Federal financial institution’s regulatory agency requires an appraisal; or 

>>The loan is a high-cost mortgage, as defined by TILA. 

Home Mortgage Disclosure Act (“HMDA”)

An insured depository institution or insured credit union that originated fewer than 500 closed end mortgages or open-end lines of credit is exempt from the requirement to itemize certain loan data under HMDA unless they have received a rating of “needs to improve record of meeting community credit needs” during each of its two most recent examinations of a rating of “substantial noncompliance in meeting community credit needs” on its most recent examination under the Community Reinvestment Act.

Credit Union Residential Loans

A loan secured by a lien on a 1-4 family dwelling that is not the primary residence of a member of a credit union will not be considered a member business loan under the Federal Credit Union Act.

Protecting Access to Manufactured Homes

Retailers of manufactured homes or employees of such retailers are not required to be licensed as mortgage originators unless:

>>They receive compensation or gain for acting as a mortgage originator that is in excess of any compensation or gain received in a comparable cash transaction;

>>They fail to provide certain disclosures to consumers; or

>>They directly negotiate with the consumer or lender on loan terms.

No Wait for Lower Mortgage Rates

If a creditor extends to a consumer a second offer of credit with a lower annual percentage rate, the transaction may be consummated without regard to the 3 day waiting period requirements in the TRID disclosures.

Congress instructed the CFPB to provide clearer, authoritative guidance on:

>>Applicability of TRID to mortgage assumption transactions;

>>Applicability of TRID to construction to permanent home loans and the conditions under which those loans can be properly originated; and

>>The extent to which lenders can rely on model disclosures if the recent TRID changes are not reflected in the TRID forms published by the CFPB.

Identification for Opening an Account

When an individual initiates a request through an online service to open an account with a financial institution or obtain a financial product or service from a financial institution, the financial institution may record personal information from a scan of the driver’s license or personal identification card of the individual, or make a copy or receive an image of the driver’s license or personal identification card of the individual, and store or retain such information in any electronic format for the following purposes:

>>To verify the authenticity of the driver’s license or personal identification card;

>>To verify the identity of the individual; and

>>To comply with a legal requirement to record, retain or transmit the personal information in connection with opening an account or obtaining a financial product or service.

A financial institution that makes a copy or receives an image of a driver’s license or personal identification card of an individual must, after using the image for the purposes described, permanently delete:

>>Any image of the driver’s license or personal identification card, as applicable; and

>>Any copy of any such image.

This provision preempts and supersedes any state law that conflicts with this provision.

Reducing Identity Theft

“Fraud protection data” means a combination of the following information with respect to an individual:

>>The name of the individual (including the first name and any family forename or surname of the individual);

>>The social security number of the individual; and

>>The date of birth (including the month, date, and year) of the individual.

“Permitted entity” means a financial institution or a service provider, subsidiary, affiliate, agent, subcontractor, or assignee of a financial institution.

Before providing confirmation of fraud protection data to a permitted entity, the Commissioner of the Social Security Administration (“Commissioner”) must ensure that the Commissioner has a certification from the permitted entity that is dated not more than two years before the date on which that confirmation is provided that includes the following declarations: 

>>The entity is a permitted entity; 

>>The entity is in compliance with these provisions; 

>>The entity is, and will remain, in compliance with its privacy and data security requirements, as described in the Gramm-Leach-Bliley Act, with respect to information the entity receives from the Commissioner;

>>The entity will retain sufficient records to demonstrate its compliance with its certification and these provisions for a period of not less than two years. 

A permitted entity may submit a request to a database or similar resource only:

>>Pursuant to the written, including electronic, consent received by a permitted entity from the individual who is the subject of the request; and 

>>In connection with a credit transaction or any circumstance described in the Fair Credit Reporting Act. 

For a permitted entity to use the consent of an individual received electronically, the permitted entity must obtain the individual’s electronic signature, as defined by the Electronic Signatures in Global and National Commerce Act. 

No provision of law or requirement will prevent the use of electronic consent for purposes of these provisions or for use in any other consent based verification under the discretion of the Commissioner. 

Protecting Tenants at Foreclosure

Certain notification and eviction requirements for renters living in foreclosed properties have been reinstated with the repeal of sunset provisions of the Protecting Tenants at Foreclosure Act.

Remediating Lead and Asbestos Hazards

The Secretary of the Treasury may now use loan guarantees and credit enhancements to facilitate loan modifications to remediate lead and asbestos hazards in residential properties.

Property Assessed Clean Energy (“PACE”) Financing

“PACE financing” means financing to cover the costs of home improvements that result in a tax assessment on the real property of the consumer.

The CFPB must prescribe regulations that require a creditor to evaluate a consumer’s ability to repay with respect to PACE financing.

Protecting Veterans from Predatory Lending

A loan to a veteran for the refinance of a loan to purchase or construct a house may not be guaranteed or insured unless:

>>The issuer of the refinanced loan provides the Department of Veterans Affairs (“VA”) with a certification of the recoupment period for fees, closing costs, and any expenses (other than taxes, amounts held in escrow, and certain fees) that would be incurred by the borrower in the refinancing of the loan; 

>>All of the fees and incurred costs are scheduled to be recouped on or before the date that is 36 months after the date of loan issuance; and 

>>The recoupment is calculated through lower regular monthly payments (other than taxes, amounts held in escrow, and certain fees) as a result of the refinanced loan. 

A loan to a veteran for the refinance of a loan to purchase or construct a house may not be guaranteed or insured unless:

>>The issuer of the refinanced loan provides the borrower with a net tangible benefit test; 

>>In a case in which the original loan had a fixed rate mortgage interest rate and the refinanced loan will have a fixed rate mortgage interest rate, the refinanced loan has a mortgage interest rate that is not less than 50 basis points less than the previous loan; 

>>In a case in which the original loan had a fixed rate mortgage interest rate and the refinanced loan will have an adjustable rate mortgage interest rate, the refinanced loan has a mortgage interest rate that is not less than 200 basis points less than the previous loan; and 

>>The lower interest rate is not produced solely from discount points, unless:

A. Such points are paid at closing; and 

B. Such points are not added to the principal loan amount, unless:

1.) For discount point amounts that are less than or equal to one discount point, the resulting loan balance after any fees and expenses allows the property with respect to which the loan was issued to maintain a loan to value ratio of 100 percent or less; and 

2.) For discount point amounts that are greater than one discount point, the resulting loan balance after any fees and expenses allows the property with respect to which the loan was issued to maintain a loan to value ratio of 90 percent or less. 

A loan to a veteran to refinance a loan to purchase or construct a house may not be guaranteed or insured until the date that is the later of:

>>The date that is 210 days after the date on which the first monthly payment is made on the loan; and 

>>The date on which the sixth monthly payment is made on the loan. 

The above provisions do not apply in a case of a refinance loan in which the amount of the principal for the new loan to be guaranteed or insured is larger than the payoff amount of the refinanced loan. 

On May 25, 2018, VA issued a Policy Guidance Update: VA Refinance Loan and the Economic Growth, Regulatory Relief and Consumer Protection Act discussing the Act and its design to protect veterans from predatory lending practices known as “loan churning” or “serial refinancing.”

The Government National Mortgage Association may not guarantee the timely payment of principal and interest on a security that is backed by a refinance mortgage insured or guaranteed by VA and that was refinanced until the later of the date that is 210 days after the date on which the first monthly payment is made on the mortgage being refinanced and the date on which 6 full monthly payments have been made on the mortgage being refinanced. 

Credit Score Competition

Fannie Mae and Freddie Mac are required to evaluate other credit models besides FICO for credit scoring to determine whether they may be used for underwriting decisions.

Foreclosure Relief and Extension for Servicemembers

A legal action to enforce a real estate debt against a servicemember on active duty or active service may be stopped by a court if it occurs within one year from the servicemember’s end of active service. 

Further Reforms?

There is speculation that the Act is not the last reform to Dodd-Frank that we will see. Such speculation became reality with the passage of the “JOBS and Investor Confidence Act of 2018” (S.488) which had strong bi-partisan support. The TRID Improvement Act (S.2490) is pending legislation addressing changes for title insurance premiums which may be discounted as allowed by state regulation. 

With these bills, there will be more reforms to Dodd-Frank; however, future legislative activity may depend upon mid-term elections.

This article provides an overview of part of the Act by Asurity Technologies based on our understanding of the Act and is not intended to and should not be considered legal advice. 

About The Author

Discover The Digital Demands

We live in a world that is based primarily online, as technology has been taking over our day to day lives. Rapidly, we see technology expanding and changing life as we know it. Did you ever think that you would be able to stop sending out checks and paying bills manually? With the click of a button we can now send a digital payment across the country. The same idea goes for the homebuying process. No one wants to leave the privacy of their home when they could simply apply for a mortgage online. It should essentially be as easy as purchasing concert tickets through the web, providing only the necessary information that is needed without a long wait time. The world is changing by the minute, which is why businesses such as mortgage companies have to make strides to keep up with today’s technology. 


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Millenials are at the stage in their lives where they are the ones who are ready to buy houses. They are quickly taking over the homebuyer market, and will only expand from here. There is going to come a time where Millennials and Generation Z members, whose lives have revolved around electronics, engulf the entire mortgage industry. Now is the time for mortgage professionals to advance their digital presence, accommodate millennials, and prepare for what comes next. Lenders are going to have to make every effort to keep up with the times, as digital mortgages are what millenials are anticipating.

Digital point-of-sale applications are growing in the mortgage industry, and it’s obvious as to why. Not only is it more convenient for the homebuyer, but it assists the lender throughout the process as well. As for the borrower, they can apply for a loan while on the go, or sitting in the comfort of their own home. They certainly don’t have to go through as many tedious questions that don’t apply to them, and they can avoid the back and forth process between the bank and their loan officer. In addition, they have the ability to jump around the application, filling out whatever information they have on hand. Due to this, they no longer have to stop after five minutes because they are missing information and can’t proceed to the next section. It ultimately ends up accelerating the process in a more efficient manner. In terms of the lender, they will save in operating and closing costs by utilizing a fully automated mortgage application. Many applications even include full customization with real-time data validation, ensuring that the lender is receiving quality data. It’s no wonder that borrowers and lenders alike prefer the newly enhanced, digital 1003 application.


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Mike Goldman, COO of AmCap and digital POS adopter, has had nothing but good things to say about his combination of digital mortgage solution provider and asset verification platform. Before their transitional period, their team had created a task force made up of business leaders that consisted of  originations, compliance, operations and executive management in order to find thebest in class providers.  Their overall goal was to primarily provide their borrowers with a digital customer experience whileimprovingloan efficiency. They went as far as looking at more than twentydifferent providers before coming to the conclusion that theyneeded an advanced digital solution that could seamlessly integrate with an asset verification platform.  In other words, they were in need of a financial data platform that would allow themto deliver the digital customer experience that they were looking for, while reducing loan manufacturing costs.

AmCap Home Loans houses 117 different branch locations with 442 loan officers. As Goldman mentioned, their company finds value in the combination of their digital mortgage solution and asset verification platform.  Inshort, digital mortgage solutions provide a variety of products to the mortgage application process including mortgage compliant websites, pre-qualification forms, and digital 1003 applications. On the other hand, asset verification platforms are there to automate formerly manual loan processes by collecting and verifying crucial borrower information such as assets, employment, and income, to ensure that the lender is receiving quality data.  The two combined ultimately create an experience that seems to sit well with both the lender and the borrower.


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As stated previously, it is critical to accommodate users online, millennials in particular. Not only should they have a digital 1003 application at their disposal, but they should have an easy to use, mobile responsive website that they can trust to hold their personal information. Even if a mortgage company has a well-equipped application, users won’t trust putting their personal information into it if it appears that their website was thrown together and unsecure.

Steve Polito, EVP of Marketing and Mortgage Technology at Annie Mac Home Mortgage, was most impressed with the leads they were able to capture when they implemented new digital solutions.  When theyupgradedtheirdigital lending platform theywere able to streamline web lead capture points for the first time, which made a big difference in their business. He also was impressed with the solutions short app and full 1003 due to their stabilityand the fact that that their data could seamlessly integratewith theirLOS and Velocify.  For their companyin particular, the ability to easily create affinity and landing pages opened many new opportunities for their marketing department as a whole.

Annie Mac Home Mortgage has 72 different branch locations with 287 loan officers. Annie Mac, in particular, utilizes a prequalification application, which generally pre approves a borrower before filling out the formal 1003 application. Their application actually integrates with Velocify, thus allowing their company to have a prosperous sales funnel with good CRM and lead management. At this point, their loan officers can personally reach out to various borrowers in order to get them to continue their homebuying process with Annie Mac. There’s nothing like having leads right at your fingertips thanks to a digital platform.  

Let’s not forgot about realtors, who also play a significant role in the home buying process. While they don’t have to worry about implementing point-of-sale applications, they do still have to ensure that their website is providing them with the greatest amount of visibility so that homebuyers can easily find them. Their websites should be appealing, and make the buyer want to choose them. 

A New Jersey realtor said, “The right digital solution has given me the opportunity to grow my number of leads and my presence in the real estate community. I love that my site pulls from the MLS and that I can post as many single property sites as I need. I’ve been using this tool for years and will continue to do so!”

The homebuying process has various levels to it, and now there are digital solutions at every stage. That’s really where satisfied clients see the benefits when taking the leap into a digital platform.  The world is headed on the track to becoming fully digital based due to its efficiency and overall productivity. With the millennial generation taking over the homebuying market, I think it is safe to say that they want a 1003 application that fits into the rest of their everyday lives. The digital demands that we are facing today can be overwhelming, but not when you choose a leading digital mortgage provider.

What each of these lenders and realtors have in common is the same award winning digital lending platform produced by WebMax.  WebMax provides innovative, digital solutions designed to make Mortgage and Real Estate easy by enhancing the lending experience. Their focus includes: Boosting Lead Generation, Maximizing Conversion, Expediting the Origination Process, Enhancing Referral Partnerships, Bolstering Client’s Digital Presence, and Offering Effective Industry Tools.

WebMax, (www.webmaxco.com) believes that home buyers need a simpler, faster way to acquire a mortgage. In order to achieve this, WebMax provides intuitive digital mortgage software solutions designed to deliver a superior consumer borrowing experience while reducing the loan manufacturing cost. With products spanning the entire digital mortgage process, from the first borrower click to the last lender approval, WebMax makes sense of the digital-first regulatory-ridden mortgage Industry for borrowers and lenders alike.

About The Author

Digital Lending In Action

There are conformists; companies content to follow the norm. Then, there is Alterra Home Loans. This Las Vegas-based mortgage company has been charting its own path since opening its doors, first as a wholesale lender in 2007, then moving to retail in 2009.


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“Our company is based on serving minorities and diverse markets; with an emphasis on new home buyers,” explained Miguel Narvaez, EVP, Chief Production Officer for Alterra Home Loans. “Today, about 92 percent of our business is purchase, with 82 percent of those loans going to diverse communities. About 60 percent of those customers are first-time home buyers, so, our operations are very specialized to their needs. That’s the first way we differentiate ourselves.”

The second is through technology.

“We are fanatics of technology, obsessed with speed, and making sure we get  the information we need quickly. We were one of the first companies to use our LOS, Lending QB,” he said.  “We created our data analytics platform, Alterra Dashboard, a few years back. It now tracks each area of the company, automatically issuing reports every three minutes. At any given moment, we know where we stand, in terms of profitability, customer service and sales.”


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But, company leaders also believe that the value of technology extends beyond the back office. To that end, this digital leader is not afraid to stay on the bleeding edge—not only bringing on new technology, but, oftentimes, developing their own to drives sales, build relationships and differentiate in a very real way.  

Here are three of the most recent examples of this digital lender in action.  

A Vision, a Mobile App and a Lesson Learned 

As the mobile device entered ubiquity, Alterra leaders started thinking about the possibilities.  


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“About two and a half years ago, we started looking for a mobile app that would facilitate communication, transparency and improve the relationship between Realtors and our loan officers,” Narvaez said. “Remember, at the time, about 95 percent of the industry did not have any type of mobile mortgage application, so, we were considering something  that was very new.”

Not finding exactly what he wanted, Narvaez hired a team of contract developers and built the Pronto mobile application themselves.  

After two years, the application was ready to be launched—so, everyone thought.

“When you build an application, you want to make sure that it is adopted, because adoption is priceless,” Narvaez said.” But, when we launched Pronto, we realized that we had a lot of issues on the back side of the platform, so, the product wasn’t being used.”

Instead of going back to the drawing board, Narvaez decided to take another look at what was out in the market. He zeroed in on SimpleNexus, which had grown substantially as a company and as a proven platform in the time Alterra was developing and launching its own mobile platform. 

Navarez liked what he saw, including the ability to custom brand the application. 

“We decided not to try to keep building what was now already out there and proven to work,” Narvaez said. “So, SimpleNexus became the new Pronto, which we launched in July of 2018.”

Alterra loan officers can customize and share the application with their Realtors, who then  share it with their customers; streamlining communications and giving everyone transparency into what’s going on with the transaction. 

That was innovation one. 

A Faster Way to Create High-quality Marketing Materials

The second recent innovation came from looking at pain points; areas where Realtors had problems that need to be solved.

“We knew our loan officers and Realtors were frustrated by long the lead times they needed to create quality, customized marketing materials,” Narvaez said. “We came across a company that offered a commercial platform that let people go online and create their own fliers. I met with our marketing manager and said, ‘We need to create a tool like that for our salespeople that’s specific to the mortgage side’.”  

He contracted with a development and design team that was familiar with the mortgage industry and, in six months, launched AXIS. This proprietary marketing platform enables   Realtors to create their own, high-quality fliers and send these to print—and do it all, literally, in minutes. 

“Remember, everything we do is to empower and create better relationships with our Realtors. We do that by solving their problems and helping them be more successful,”Narvaez said.  

A Streamlined Path to Conversions

Alterra is taking that mantra to the next level with the rollout of A3C, short for ‘Alterra’s three  Cs,’ which are capture, convertand close.  What A3C doesis enable the company’s realtor partners to increase their conversion ratio, solving an age-old problem that has plagued the industry for decades.

“A Realtor might get 5,000 visits on a web site. Of those, he or she might capture 200-250 leads, and of those leads, that Realtor might convert two or three of those into closing transactions,” Narvaez explained. “The problem is, real estate agents can’t physically follow up with each of those leads. They’d rather be showing houses and getting contracts.”

With A3C, Alterra created a system that connects to the Realtor site, automatically creates a profile for every visitor, and immediately moves those prospects into a retargeting campaign. So, the next time that visitor logs on to the Internet, he or she is going to start seeing banners for that Realtor, which are tied to a landing page. 

“The minute the prospect clicks on the banner and hits the landing page, that contact information automatically goes into a CRM that triggers SMS text messaging, and connects the prospect with a live attendant,” Narvaez said. “A3C is unique in that it includes multiple different technologies: one for capturing and generating profiles, a technology for SMS campaigns, a technology for the CRM side to capture, store and create campaigns, and technology for the landing pages to redirect all traffic. So, basically, A3C grabs all of these amazing technologies, and adapts them into one system that helps the industry convert more leads.”

According to Narvaez, there are a lot of existing solutions that support the incubation of web site hits and leads, but someone still has to pick up the phone and physically follow up with thousands of leads, which isn’t realistic. 

“Multimillion-dollar companies use this level of technology to sell cars or furniture, but nothing like this existed in the mortgage industry until A3C,”Narvaez said. 

It’s the biggest initiative Alterra has taken on to date, and the biggest innovation Narvaez’ team has put out in the market. 

Next Steps: Adoption, Analysis and a Focus on Results

At the time of this writing, SimpleNexus (aka Pronto), AXIS and A3C have only been rolled out companywide for a little more than a month. 

Narvaez’ focus right now is adoption, adoption, adoption—the key to maximizing results from Alterra’s technology investment. 

“We’re running monthly contests where our top Pronto users win prizes and trips to  Riviera Maya, Mexico, to drive adoption. The real benefit is, in addition to posting the names of our top five users, we also post their results, so, other loan officers can see how the use of the app correlates to an increase in production,” Narvaez said. “The message we want to get across is this: use more Pronto—our branded SimpleNexus platform—get more prospects, engage more Realtors and get better results.”

Today, just one month after deployment,  75 percent of the company’s 300 loan officers are Pronto/SimpleNexus  users. Sixty-nine percent of those loan officers have activated referral partners, who now use co-branded versions of the application, with the top loan officers activating more than 50 referral partners each. Most significantly, 40 percent of those loan officers have new loans generated by borrowers with whom they’ve shared the app, with the top eight loan officer users taking in 20 or more loan applications each. 

“We don’t expect 100 percent adoption; we respect that some people in the company aren’t tech savvy or won’t use it—and that’s fine,” Narvaez. “We are more focused on making sure that the people who adopt it know how to use Pronto to its full potential.”

Narvaez is following a similar technique to drive adoption with AXIS and A3C, starting with training, making sure loan officers understand the value proposition; and sharing success stories as these happen.  

“We have a top producer who has built her entire business using Pronto (SimpleNexus). She has not only generated excitement among her Realtors, but she has already been able to grow her pipeline,” Narvaez said. “As we go through the next six months, we will continue to measure our metrics, and compare the use of Pronto, AXIS and A3C with the production and profitability of our loan officers and branches. Then, we’ll continue to compare those results year over year.”

The Mindset of a Digital Lender

By anyone’s standards, Alterra Home Loans is a pioneer in digital lending, using  technology to help build relationships, streamline communications and, ultimately, help loan officers and Realtors convert more prospects into sales. Narvaez believes that Alterra’s creative use of technology is key to survival in a changing mortgage industry.“As rates increase and refis disappear, you have to look at how you’re going to engage with Realtors, and how you’re going to differentiate as a lender,” he said. “You cannot just walk up and say, ‘I’m a lender, I have experience, I will close on time.’ You have to bring the technology that will offer transparency, close the communication gaps and give those Realtors—and their customers—an amazing experience. We believe that the innovators; the ones that use technology to solve problems, to build relationships and to offer something more, will be the lenders that continue to grow and profit in the future.”

About The Author

Customer Empowerment A Key Driver Of Satisfaction In Mortgage

Typical consumers are fairly comfortable with the digital world we live in today.  These savvy web-surfers confidently search online for products and services; conduct research on the performance and reputation of providers; compare the features and pricing of similar solutions; and execute on their decisions when they are ready.  If interacting with a customer service professional or “robot” is required before consumers can proceed, it can certainly dampen customer satisfaction levels, negatively impact sales and reflect poorly on the company’s brand.


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It’s not that consumers always want to do everything themselves – but they do want to be empowered to act independently if they so choose. They want the website, program or app to be easy to find and understand; available upon demand; and to be so well-designed and intuitive that little to no thinking is required to achieve their desired outcome. 


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Research findings also suggest that customers who are empowered with ready access to the information and functionality they need to conduct business independently tend to have a positive experience with the process, which often translates into a positive opinion of the company and its solutions, and ultimately sales. 


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Freeing Up Data and Information

Traditionally, mortgage servicers have been the primary gatekeepers of mortgage-related customer information, as well as the data associated with their home loans. To access this information, customers must interact directly with their providers, ask them to determine their options, and then request the analysis required to make recommendations about the customer’s best course of action. This accessibility barrier to loan information contradicts the ease of self-service options for other types of information that deliver details faster and more efficiently to customers on demand.

Widespread internet access means that most consumers can visit an extensive number of websites and apps that make self-service both possible and easily accessible. From airline and hotel apps to retail shopping, education, banking and social networking apps, consumers enjoy the satisfaction of doing business online, quickly finding the information they need and completing their transactions.  Today, people can even purchase a car online and have it delivered to their front door – all without speaking to a salesperson!

Of course, there are still a number of business sectors where consumer access to information and analysis for decision-making is difficult, if not impossible. And, many consumers still prefer to interact with a company representative to discuss product and service options before deciding upon a course of action. With today’s digital technology, this personal interaction can now be a choice based upon a consumer’s preference – rather than a requirement for consumers to get the information and answers they need.

Empowering the Homeowner with Information

One of the most important investments many consumers make is the purchase of a home. There are several helpful websites and apps that enable potential buyers to see homes that are for sale; learn about neighborhoods, schools, and crime rates; find out how much taxes are; and even see a 360-degree view of a home’s interior. Real estate agents are readily available to support the buying process with just the click of a button on a website. And, on many sites, lenders stand ready to offer the consumer approval on a mortgage loan. With these self-service capabilities, the consumer can use their personal device (e.g., laptop, tablet or smartphone) to find one of the most important wealth-building assets they will ever own.

Once they’ve secured a loan, homeowners benefit from understanding how to best manage their home loan. Certainly, many consumers can obtain information about their house payments, amount of interest paid, how much equity is in their home and other related information on their bank’s website. What may not be readily apparent to them is what to do with this information or how to manage their property wealth as the years go by.

This is where a mortgage servicing app can become a consumer’s best friend — but not just any app that provides information based upon static data. What is needed is a dynamic application that accesses up-to-the-minute data to give homeowners the information they need for future home- or loan-related decision-making.

Scenario Simulation and More

We know that many, if not most, consumers prefer to access their mortgage information online without the intervention of a customer service rep (unless they ask for one). But we also know that homeowners are not always financially savvy about how best to leverage and maximize the wealth in their homes. To help consumers make the decisions that are best for them, they need current information about their payments, interest rate and equity; how the value of their home compares to similar homes in their neighborhood; and the impact of various financial decisions they could make. And, these details need to be easily accessible and consumable. 

Today’s banking apps certainly provide basic information about the status of a consumer’s existing accounts.  But what if a mortgage servicer provided its customers with an interactive app that could do much more – such as simulate different scenarios regarding how consumers might use the equity they are building in their homes.  Such an app could offer a dashboard that would provide a quick view of market and neighborhood information, as well as the ability to click a button to make a payment. The app could also show consumers what the current (real-time) value of their home is; how a refi would impact their monthly payments or interest savings; and how making an additional principal payment on a monthly basis or in a lump sum would improve the time required to pay off their loan. This app could also show other information, such as current interest rates available or special deals their lenders may have available.

Ultimately, this is the kind of do-it-yourself functionality that mortgage customers want at their point of need. They want to be educated about what they need to know, review different scenarios, compare options, and act when and if they decide to. They want quick access to customer support if they need it, without feeling intruded upon. This is customer empowerment at its finest, and can help build the kind of customer satisfaction – and customer retention – that will last. 

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5 Things You Must Give Today’s Customers

Many of today’s customers want the ease of applying for a loan from the comfort of their couch, but that does not mean they only want to interact with machines. In September, Planet Home Lending launched a new a personal digital mortgage assistant, Skymore by Planet Home Lending. While we are excited about all the ways it will speed loans through the pipeline, we’re also keeping our focus on maintaining the human touch. 

Even as digital mortgage assistant technology automates the loan process, mortgage loan originators will continue to have a critical role as advisors and processors will still need to be available when borrowers want to pause for an explanation.


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If your company’s goal is to create a five-star-review-giving customer for life, there are five things to deliver when offering the latest technology: 

1. Knowledge

If you ask Google “What type of mortgage is right for me?,” you will see pay-per-click ads and information about different loan types. What you will not see is an answer to your question. Especially in the current purchase market, consumers benefit from talking to someone who can lay out home loan options based on personal variables, such as financial goals, and economic variables, such as local housing market conditions and interest rate movements.


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“Vanilla” customers (I would explain here. Say, “who have high credit scores, straightforward income and no recent negative credit history”) who complete an online, five-minutepre-qualification without ever speaking to a human might receive an accurate response. But the consumer who thinks their monthly bonus is their salary and do not state this accurately are going to see their pre-approval explode later.

Some of Planet Home Lending’s most glowing reviews come from customers who were told by another lender’s automated underwriting system that their sub-620 FICO prevented them from becoming homeowners. Knowing how to manually underwrite a home loan still gets some customers (“who are capable of being solid borrowers”) into homes when technology cannot. 

2. Honesty

When you are not able to provide a service or complete a task, never hesitate to tell the customer – just have a solution. If you cannot get something completed the day it needs to be done, communication with the customer when it is complete and follow up with them. Too many people say, “I can get you approvedin two days” when that is not possible, , andthey know they are not able to when they say it. There is a world of difference between saying: “Let’s see what we can do” and “We can do that.”


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Here is an example of honesty being the best policy.  A few years ago, there was a retention borrower who wanted to refinance. He lived off capital gainsand planned to submit his tax return in October. He’d filed an extension in April and then contacted us a few months later. 

The loan officer and processor told him the extension was not going to be an issue (we can do that!). The underwriter said, “no tax returns, no loan.”  

The infuriated borrower contacted our legal department. Not only did I refund his upfront fees, but I called him and explained why we could not complete the process at that time. I told him that we were not a portfolio lender; we had sold his loan to Fannie Mae and had to follow its rules. I asked him to call me in October, and we would see what we could do at that time. 

It’s been years, but I still remember what he said: “Why didn’t someone just explain that to me before?” He did call me that October. We approved him in two weeks, andhe went from being an unhappycustomer to a reallyhappy customer. The phone call to honestly explain the situation and refund his money took less than 10 minutes. 

3. Updates

One of the best features of Skymore by Planet Home Lending™ is its ability to keep borrowers updated and to show them loan status 24/7. 

Status updates are great, but we are still urging our loan officers (LOs)and processors to call borrowers. Although, inmy experience, some staff would rather email a customer than pick up the phone and have a five-minute conversation. They are aided in that task by our internal CRM, PRISM™, which providesrelationship management tools.

Calling someone to share the joyful news that they have been approved is how you make customers for life. Borrowers want a partner, not someone who sends them emails and disclosures. They are looking for help and reassurance throughout the process. And while underwriters do not usually talk to borrowers, if there is a complex issue to resolve, it should be all right for them to talk to the borrower directly.

Skymore by Planet Home Lending also lets borrowers share their screen with the loan officer so they can ask questions during the loan application process. 

Online applications create efficiencies, but when the borrower can talk to the LO while they are filling out the form, we avoid errors that can slow the process. And when there is a problem, borrowers do not want to talk to a machine. They want to talk to someone who can explain what is happening and how we are going to resolve it. 

4. Caring and thoughtfulness

In today’s market, we are constantly seeing deals where an appraisal comes in low, andthe seller will not lower the price. Sometimes the borrower has to put more money down; sometimes we use a 203(k) to close the gap via improvements, and sometimes the borrower just has to walk away.

Going through those options with borrowers and reassuring them everything is going to be OK has become a daily task for many LOs, but it’s rarely routine for the home buyer.

We know home buyers who lose out on one deal often go on to purchase a home they love even more. Yet, we forget that the borrower does not go through this kind of process everyday. Having empathy with them instead of getting impatient is important.It’s the human touch versus the technology that supports borrowers as they grieve over a lost home.

5. Speed

The technology companies put in place allows us to have a more efficient process. Customers also want speed, because they want the “yes” that relieves their anxiety. They want to know they are approved, andtheir home loan is going to close. 

While we measure speed in days or hours, speed is less about closing in a certain number of days than about doing what you say you are going to do and meeting or exceeding the days required in a purchase agreement or a borrower’s desired closing date. 

Even though I’ve been in the mortgage business for decades, when I personally go through a home purchase, I always worry. I know I am going to be approved, and I still worry. When I sold my house in Texas six years ago, the deal fell through two days before closing, andwe had to put the house back on the market. Thankfully, the market was strong. The house sold in two weeks, andwe closed a month later. But those weresix stressful weeks! 

There is always an unknown, andthat is where being honest pays off. It is better to say, “I can’t get you the closing date you wanted, but I can get you the day after,” than to schedule a closing date that is not possible.

Customers for Life

A lot of people say we need more technology in mortgage banking and they are right. But we also need more people just talking to the customer. 

We should deliver great technology and then take care of your customers as they use it. Be present with your customers. Be a partner to your customers.

Satisfied customers give good reviews and come back the next time they need a refinance or purchase loan. They might tell their friends and associates about your cool new technology (I got a loan while I was waiting in the carpool lane! Of course, I was a passenger!), but they will definitely tell them how personal and understandable you made the home loan process.

About The Author

3 Approaches For Lenders Adapting The Next-Gen Mortgage Model: Build. Buy. Renovate.

The mortgage industry is going through a technological transformation. Gone are the days of paper applications; today, 43% of mortgage shoppers start their applications online. Lenders have been racing to modernize their front-end portals to provide a digital experience for their tech-savvy customers — and those tech-savvy millennials comprised 91% of the home purchases in June 2018, according to the Ellie Mae Millennial Tracker report. 

However, while lenders have made significant investments to “improve the customer experience,” this hasn’t fundamentally improved the end-to-end process process. Closing a loan still takes an average of 40+ days, and costs continue to rise. Some savvy lenders are now evaluating automation, which speeds up closings and drives down origination costs. Focusing on improving back-end operational efficiency will take the modern mortgage experience to the next level for both borrowers and employees.


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Choosing the right solution to drive operational changes is not always straightforward, but waiting to modernize and making the wrong move can be costly. To name just a few casualties of this attitude, remember Blockbuster, Dell and, more recently, Toys ’R’ Us?


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Based on what we’ve seen with clients and industry leaders, we believe there are three main options open to lenders and homeowners alike. Here’s an interesting way to think about them: When you know your home no longer meets your needs, your choices are to: build a new house, buy a different house or remodel your existing house.

So what does that mean for the next generation of mortgage platforms? 

Much like a homeowner who’s building a house, some lenders might have a specific vision that none of the solution providers can meet. So one option is to build your own solution. 


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You start by drawing up a blueprint, getting it approved, hiring the contractor and then building your home piece by piece and step by step. The upside is that you get what you really want — a custom solution — but it could be costly and will take longer than buying something that already exists. Still, building your own solution could be the right decision if you have the time and the resources to invest. 

Keep in mind that when you build a home, having a strong foundation is critical. In this example, the strong foundation for your mortgage loan solution would be data. 

Data is at the heart of getting a mortgage. The borrowers apply for a loan by providing information about their income, credit and existing assets. The lender then uses the data collected to make a decision about the loan. When the loan closes, the lender sells or retains the loan in its portfolio. The loan data could subsequently be leveraged to drive repeat business at a later time. Many legacy systems face issues of multiple sources of data, lack of transparency, and difficulty in accessing that data for insights.

Like having a strong foundation for a house, a data-driven solution is core to building a modern technology platform because it gives you confidence in data quality that allows you to accelerate decisions, speeding up the transaction process. And you don’t have to do it alone. General contractors bring in experts like electricians to help them build components of the house. Look for solutions to help ingest data, map data for accuracy, and provide tools to make the data accessible.  

The second option is buying a different house — for example, another existing home in a neighborhood with better schools. It may be easier than building your own, with faster speed to market, but with an existing house, you don’t have the opportunity to customize each room. You may not like the layout of the kitchen even though you got the three bedrooms you needed. 

Important factors to consider when you buy an existing solution include: 

>>Length of time for implementation and configurability options 

>>Smart automation capabilities to minimize mundane tasks for maximum efficiency

>>Whether it has the ability to meet requirements for compliance 

>>Most important of all: Whether this single solution meets your short- and long-term business goals. 

Like buying an existing home, you might just have to live with the awkward kitchen layout, but there is also a third option to consider. 

That third option is to renovate. 

Let’s say you bought a house built in the 1950s. The kitchen is outdated, the bathroom has a pink sink, and the whole place needs a fresh coat of paint. 

Renovating is like a makeover of your existing infrastructure. In my experience working closely with mortgage companies for the past 15 years, we’ve been building technology that leverages data to address major pain points in the end-to-end loan process. By automating up to 80% of the manual, repetitive tasks throughout the loan process, lenders are able to create an intelligent work experience that significantly increases employee productivity, drives down costs, and reduces risk without sacrificing confidence in data accuracy — essentially remodeling your existing infrastructure. This approach can be smart and cost-effective if the goal is to see immediate gains on efficiency and ROI.

In recent years, the common theme around the “renovation” approach has been  focused on the front end for a modern, fresh consumer portal. But mortgage companies with strategic long-term thinking are also examining their options more holistically to improve the end-to-end mortgage experience for both borrowers and employees… because conventional wisdom tells us if you only replace the faucet but keep the old pipes, your kitchen is still not functioning well. 

Whether mortgage companies choose to build, buy or renovate to implement the next-gen mortgage experience will depend on their strategic objectives, resources and timeline. Whatever approach is chosen, one thing is for certain: As competition grows more fierce and the industry experiences consolidation and layoffs, now is the time to invest in the future. 

Those who make the decision to automate and invest in the right technology will gain a competitive advantage and will thrive. 

About The Author

Driving Factors For Change

In response to “The Great Meltdown,” the passing of Dodd Frank created a totally new regulatory agency the Consumer Financial Protection Bureau (CFPB) with broad regulatory and enforcement power and the bureau’s name was clear. Their primary focus is all about how lenders should treat their customers (consumers) and it introduced and imposed many new workflow requirements as to how this should be accomplished. Major regs like QM, TRID, HMDA and UCD have greatly impacted lenders, but the response to this has driven, many new products and workflows to support them. 


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GSE’s Driving the Process – Move to collecting more and better data 

As the saying goes, “Whoever has the gold makes the rules” and when it comes to what drives future trends I always look for what the investors require to package and sell them loans as you are not going to originate a loan that cannot be purchased by them to ensure fungibility 


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Automated data verification services

Partially in response to above the GSE’s jumped on board with their Uniform Mortgage Data Program (UMDP) that is utilizing MISMO data standards to introduce more automated, direct to the source (VOI, VOD, VOE) system to system data validation and verification services to reduce origination time and steps and secondary market risk. With new automated workflow products such as Freddie Mac’s Loan Quality Advisor and Fannie Mae’s Day One Certainty they are continually perfecting the model to eliminate steps, requirements and streamline the process from the traditional, linear paper verification mortgage process and putting enhanced reps and warrants around this as further inducement to implement and adopt. 


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Collecting more data upfront in the process and being able to validate it sooner results in processing and closing good loans sooner and shrinking the time to close. 

Move from a post-Closing to pre-Closing automated QC review 

Also supporting above trend, the three-day delivery requirement of the Closing Disclosure (CD) of TRID along with the GSE’s Uniform Closing Data Set, (UCD) mandate provides a huge benefit to ensuring the quality of loans pre-closing Vs post-closing. This will finally drive the value prop of eClosing as that will be the only way to ensure data and document compliance and integrity because if you paper out at closing you lose the entire benefit of maintaining a complete electronic audit trail (evidence of compliance) because you have no way of knowing what changes were made at the closing table if now leave the electronic system of record, (eVault) that captures any and all changes made to the disclosures and paper out. 

Competition for the consumer – Mining the Gol

Speaking of gold, just like the gold rush the forty-niners went to where they thought the gold was and in today’s world it’s online. Online is where the consumers are. The technical power of Smartphones, tablets and much improved transactional web sites to attract consumers eye balls, interaction and stickiness to keep them engaged and coming back for more have advanced the focus of technology to capturing consumer clicks at Point of Sale, (POS).

Creation of the new “Fintech’s” to “E”nhancing the consumer “E”xperience

With silicone valley investments and ability to develop with newer web services technology, the legacy LOS companies were slow to recognize and seize upon the opportunity to capture the consumer at the get go.  At time of application or Point of Sale, (POS). 

This has launched the creation of “Fintech” companies to create more intelligent, logical and consumer friendly UI’s at POS.  As use and demand grows for them they will continue to evolve and expand their functionality to support a full end-to-end Digital <Mortgage process. 

Drive to a ten-day close and a ten-minute closing 

Another result of capturing more data sooner is the ability for intelligent AI and machine learning systems to automate more of the routine decisioning that underwriters make. With machine learning you can build mortgagebots behind your consumer UI’s to handle the most routine, rote questions and automate responses and with AI you can mimic and continue to optimize the results of your best underwriters to ensure consistency of results across the enterprise. The real power of these systems is that they are constantly updating and learning so with every instances and response they will provide even better and more intelligent responses over time.

Blockchain Vs. eVault

Like so many of us in this business, because there are so many touch points and multiple people (both internally and externally) having to sign-off and agree on implementing something new, technology innovation, adoption and progress happens slowly in our space. But that does not preclude us for looking at the next shining object. Blockchain is one of those objects.  If we looked back in history within the mortgage space, the long list of hot technology buzzwords and acronyms that were once big news, are no longer even talked about.  

The formation of MERS and the GSE’s embracing eMortgages eVaults have existed for some time and have the legal infrastructure to support capturing the full electronic chain of evidence of events to provide a full electronic date and time stamp audit of key milestones and transactions to prove compliance.  Early on and to this day many people only believe the reason you need an eVault is to support the secure registering of a SMARTDoc® eNote with MERS, but it can and should be to provide a full electronic accounting, tracking and evidence of consumer compliance across the entire mortgage process to protect against future audits or anyone contesting the legal validity of the loan downstream. From loan application to servicing. 

SMARTDocs® Vs Smart contracts. 

Blockchain is also held up as the “new” solution to ensure the security and sanctity of the data. But one of the real values of implementing intelligent SMARTDocs® today is that any data on the document can be authenticated, shared and secured (tampered sealed) down to the field level so why wait for a totally different technology when eVaults have the legal vetting and investor acceptance to solve that need today. 

Investors acceptance of eNotes
Yes.  We’ve been talking about an end to end paperless eMortgage process for years and the GSEs have been successfully promoting it, but Dear Investor Community, it’s time to step it up and accept eNotes already!  For those that do there is a lot of pent up demand with most of our clients still doing hybrids as they currently do not have an investor take-out to purchase eNotes.  But it’s coming soon and for those that are ready to step now, (price being the same) it’s going to hard for the Johnny-Come-Lately’s to participate because once that correspondent is electronically lock in and happy with the investor that worked with them to provide it sooner it’s going to be hard to come in later and displace them.

MISMO driving standards and adoption 

Finally, all the above would not make sense unless there was some sort of data standard that can capture and interpret the data in a common structure and terminology that makes sense to all systems across the mortgage manufacturing process that need to share and utilize it. MISMO has moved from being just a data standards group to now looking into how those standards can solve real business problems for lenders. Work groups like the Fee terminology, Doc Classifications, RON, Standard Closing Instruction Letter, Verifiable SMARTDoc® eNote, Third Party Risk Assessment, Electronic Evidence and the list goes on. All the trends and initiatives to above have incorporated MISMO to ensure the data, loan quality and most importantly compliance of the information that is shared across systems. 

Now that it appears at least for the time being that the CFPB has backed off from enforcement lenders have some time to take a collective breath and really look at doing some innovating and implementing technology strategically rather than the reactive and piecemeal approach to responding to the flurry of regs that have been inundating them for the last few years. Lenders only need to look at the rapid growth of a previous income tax technology company called Quicken to become the number one originator in the country to see how making it easier for consumers to do business with them Vs. the old, traditional, antiquated mortgage process to see who’s driving innovation and adoption in this space.

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