Five Principles for Building Lasting Business Relationships


John DetwilerBuilding long-term relationships can seem complex. There is seemingly endless, often varying, research on the topic, and the only thing that seems clear is that there is no one-size-fits-all approach.

I’ve spent the past 17 years developing relationships with lenders, technology firms, government entities and coworkers across the country, while consistently educating myself on the latest research and trends. Perhaps more even more influential was spending my teen years in Israel, experiencing completely different circumstances and speaking a completely different language. Coming back to the US was far and away one of the toughest transitions I have experienced in my life. To this day, interpreting the meaning behind what someone is saying forces me to actively analyze and read between the lines in a way that I noticed most other Americans do not.

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What I’ve found is that relationship-building and interpersonal communication requires a foundational framework. Often, your ability to create – and maintain – relationships has a direct correlation to your success. Questions like, “how do I form real relationships with my customers?” or “how do I connect with my boss?” are common. To answer these questions – and many others like it – I have identified five principles of creating relationships that last:

1.) Listen

2.) Accept

3.) Respect

4.) Care

5.) Trust

I have intentionally listed each principle in the form of a verb. I find that actively employing these factors is the only way to create long-lasting relationships. To strengthen existing long-term relationships, you can tactically add these principles as needed, though it is likely that most – if not all – of these principles are already in place.

For new relationships, you must be open-minded and think long term. After all, people you have not yet met may hold the keys to a new business opportunity or partnership. Look at meeting new people as an opportunity. First impressions are everything.

When we meet people, there are many exterior factors at play: Is this a business relationship or a personal relationship? What is their knowledge and expertise? Where are they from? What major events have they experienced in their lifetime? The list is virtually endless. No two people are alike. How they communicate, and how they perceive others will vary from person to person. Employing the techniques listed below will help ensure you put your best foot forward when meeting someone new.

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Listen. This ancient, unfortunately underutilized, art is the ability to engage all of your senses at once and pick up on the complete environment. This means using your eyes to pick up on body language, your ears to hear what the person is saying and the tone in which they are saying it, and your mind to process all of this into a complete picture of what the person is – and isn’t – saying. Below are the steps I use to ensure I am in maximum listening mode.

First, clear your mind of distracting thoughts. You can do this by writing down your ideas and key points beforehand. What do you want to learn from this meeting? What key points do you want to convey? Be quiet and allow others to speak and finish their thoughts. Be open-minded and stay focused and receptive to the topics and shared thoughts. This is the most important part; people can tell when someone is focused on what they are saying or if they have already made up their mind without actually listening.

By actively listening, you will be able to better understand the person you are meeting with and the topic at hand. You will likely have more relevant questions, increasing the productivity of your interactions. The possibility of misunderstandings as the relationship unfolds will also be minimized.

Accept. This learned behavior, if employed correctly, will vastly improve both your professional and personal relationships. Accepting is the ability to recognize other’s values, beliefs, and behaviors without introducing negative judgments or prejudices.

In a society where media forces opinions on us daily, and everyone seems to post their opinions at will, acceptance can be weakened over time. Think of acceptance as a muscle to be developed. Focus on similarities. You may be meeting people from different countries or from other industries with different interests and needs. Be sensitive, and always remain willing to grow and learn from those with different perspectives from your own.

Respect. Accepting and respecting are closely tied. Be authentic in your discussions with others. Recognize people’s interests, needs, and – most importantly – feelings. Of course, not everyone who portrays feelings and needs is being honest with his or her intentions, but giving respect will help you begin to see through any falsities.

When speaking with someone in person, speak clearly and face them. Use your parent’s old lessons of being polite and kind. While you’re at it, go ahead and smile – it’s all about your attitude. Respect also means the ability to compromise as opposed to seeing only black and white. Working towards a solution will lead to relationships that last.

Ultimately, respect will promote dignity and the feeling that everyone adds value, leading to the belief that everyone has something to contribute.

Care. This is one of my favorites. Care shows a genuine interest in the wellbeing of those around you. If you truly care about the people you meet and work with, it no longer feels like an obligation to form relationships.

For some, this may be the most challenging element to implement. The more you work towards caring, the easier it will be over time. Show your emotion when it is appropriate; be excited for the people around you. Connect with your own emotions, and be true to them while not letting them drive you. Be generous, giving more than is expected when you can.

Caring promotes a deeper engagement with those around us. The by-product of care is loyalty and trust.

Trust. Be willing to demonstrate authenticity, honesty, reliability, and competency in the service you provide. Stand behind your visions and convictions. Be accomplished and dedicated to yourself and your work.

Build trust by following through with your promises. Use common language and develop an understanding of, and appreciation for, the cultures of those you are forming relationships with. Learn their values. This will ultimately promote long-term, successful relationships through the safe exchange of ideas and issues.

These principles will only work if you are open to forming new relationships. Over time, each of these will become a habit, requiring less active work on your part. Over time, if practiced, each will become an integral part of your work ethic. Give respect as a starting point, learn from acceptance, and listen to what you find. Your relationships will flourish.

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Tech Firm Embraces Cloud Computing

Cloud computing has taken off. For example, Accenture Mortgage Cadence has transitioned all of its clients – more than 600 mortgage lenders across the United States – to the Accenture Mortgage Cadence Cloud, helping the lenders better manage loan-processing cycle times, increase system reliability and seamlessly leverage product upgrades.

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“Today’s digitally savvy borrowers expect the same kind of quick, efficient service from their mortgage lender that they get from online retailers and other services,” said Keith Moore, Software Cloud and SaaS Support Executive for Accenture Mortgage Cadence. “All clients using our Enterprise Lending Center and our Loan Fulfillment Center have moved to our enhanced cloud technology, which provides the environment needed to get borrowers to the closing table on time while keeping up with the fast-changing regulatory landscape.”

The Loan Fulfillment Center and Enterprise Lending Center are software-as-a-service (SaaS)-based loan origination systems from Accenture Mortgage Cadence. The transition to the enhanced cloud will provide Accenture Mortgage Cadence clients faster servers, more system storage, enhanced regulatory compliance and loan origination efficiency and scalability to support a growing client base.

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“When designed properly, cloud technologies are the perfect building blocks for mission-critical solutions such as our Mortgage Cadence platform,” said Trevor Gauthier, managing director of Accenture Mortgage Cadence. “We are proud to be an early adopter of SaaS mortgage technology, and today ours is one of the most-mature cloud-based technologies in the industry. Our software solutions provide maximum uptime to ensure that our clients are able to provide their borrowers with fast and reliable service.

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The CFPB Favors eClosing


TME-DGreenThe Consumer Financial Protection Bureau (CFPB) released “Leveraging Technology to Empower Consumers at Closing” on August 5, 2015. This is an eagerly anticipated report covering the eClosing Pilot project the CFPB conducted with a group of lenders and mortgage technologists during the first four months of this year. (Full disclosure: we participated in the pilot with BECU, our long-time partner and one of the most experienced users of our lending technologies.)

A little background: The CFPB issued a Request for Quotation last April from teams of lenders and technology partners to help them test several hypotheses concerning the paper-based mortgage closing process as it exists today versus the newer, still under-utilized eClosing processes successfully used by some lenders. The CFPB’s hypotheses — that consumers would favor eClosing over paper closing because it would give them a better understanding of the process and a feeling of empowerment, leading to greater satisfaction — all turned out to be true.

We – Accenture Mortgage Cadence and BECU – thought we would make ideal pilot project participants because of our longstanding interest in improving the borrower experience, as well as our more than seven years of history in eClosing mortgage loans. For BECU, eClosing has, since October 2008, been one part of a bigger, overall eMortgage process to make the origination cycle completely paperless, from origination through closing and delivery.

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Improving the borrower experience was one big reason for this initiative; increasing lending efficiency was the other. An efficient mortgage program, after all, is both a profitable and competitive program. Being a pioneer eCloser also provides competitive differentiation. Thousands of BECU members have closed electronically in the last seven years, enjoying the benefits of receiving their closing package days before the closing itself, giving them the opportunity to review the documents before their closing meeting. It also leads to time savings at the closing table. Receiving a copy of their completed closing package on a memory stick is an added welcome bonus, too — more secure than a large file folder, much more accessible, and tremendously space-saving.

It obviously helped that we believed in the CFPB study and the hypotheses it tested, which made us eager to participate. The results, we believed, would also provide hard data to support the benefits of moving beyond traditional processes, pushing consumers and the industry forward.

One important note on eClosing: It does not have to be entirely paperless. The CFPB’s report discusses a hybrid eClosing model that involves both electronic and wet signatures depending on lender capabilities, comfort and recording entity preference and readiness for new technologies.

Why Don’t More Lenders eClose?

We have been closing loans electronically for more than seven years, yet eClosing is still relatively uncommon. One likely reason for this is the hard work required to transition from paper closings. It takes a fair amount of time and a true commitment from the entire organization. Timing is often challenging, too. For example, 2008 marked the beginning of the recession and its aftermath, and nearly every year since has seen new regulations to which lenders must adapt. Lenders have been far too busy to even think about major process changes.

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In addition, refinancing recently captured everyone’s attention, as borrowers scrambled to take advantage of rates not seen since the 1940s. While seven years may seem like a long time for eClose to remain in development, it was far from an easy seven years for the mortgage industry. Another issue holding back eClosing is the persistent belief that mortgages closed electronically aren’t legal, valid, enforceable loans. This is despite the Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transaction Act (UETA), which establish clear legal authority and procedures for electronic signatures. UETA came first in 1999, followed by the ESIGN Act in 2000. Both provide for creating an electronic record with the equivalent enforceability of a mortgage note.

Legal traditions in the mortgage industry are ancient. Yet electronic consent first appeared in mortgage transactions at the dawn of online lending. Electronic signatures for all sorts of financial transactions are so commonplace as to be expected; in fact, being presented with a pen and document is almost a surprise in some situations. It is time, we believe, to make this true at the closing table, too.

Times have changed, yet again, for mortgage lenders. Mortgage workouts are almost a thing of the past. Most refinancing is probably activity seen in the rearview mirror, as well. Big regulatory changes such as ATM/QR and the Mortgage Disclosure Regulation (also known as TRID and KBYO) will be behind us in October. With the market settling into a steady, long-term purchase run estimated to produce consistent annual volume in the $1.1 to $1.4 trillion range, and these big projects checked off the to-do list, will eClosing finally become a top priority for lenders?

We think the answer should be “yes” for all the reasons cited in the CFPB’s report:

>> During the pilot program, consumers who received their closing documents three days before closing perceived greater empowerment through the closing process. They also said they had a better understanding of the closing process. Receiving documents early gave them a chance to read through their closing packages, check for accuracy and ask questions.

It is important to mention that, during the pilot, borrowers received their entire closing package three days prior to closing. This is different from the Mortgage Disclosure Rule (TRID/KBYO) requirement that they receive only their closing disclosure three days ahead of time. There is nothing in the regulation that prohibits providing the entire closing package early. In fact, learnings from this project show borrowers prefer this approach.

>> Pilot program consumers who received their closing documents three days before closing reported shorter closing meetings than those who experienced paper closings, which indicates greater efficiency in the process as well as higher borrower satisfaction.

>> Consumers who were provided access to the CFPB’s educational materials along with their closing packages reported using them and also reported they found them helpful. Mortgage documents can be confusing, especially since most borrowers see them once every five to seven years. When you only see something a few times in your lifetime, every time you see it again is an entirely new experience. Providing reference material along with the closing package is a good idea, and one that borrowers like.

Greater consumer satisfaction, understanding, empowerment and increased efficiency are good reasons to consider eClose, but there’s another reason. A new generation of borrowers is emerging. The Millennial generation, the largest in history, is poised to begin forming households and, thereafter, to become homeowners. The U.S. economy and the mortgage industry have been expecting them to engage for the past several years, and, while it has not happened yet, the Joint Center for Housing Studies of Harvard University predicts that it will, driving annual household formation to above 1.2 million per year between now and 2020. Even with homeownership rates in the low- to mid-60 percent range, that equates to more than 750,000 new homeowners each year.

Millennials have different expectations than their predecessors when it comes to transactions. They grew up online and do not remember a time when there were no smart devices. Paper-based processes, such as those traditionally used in the mortgage industry, are not going to fly with this important group. Millennials have also lived through the housing crisis, watching parents and relatives deal with the aftermath. Consequently, they are going to have a lot of questions about their mortgages. They will research online, they will want to watch their mortgage ‘mature’ throughout its lifecycle, and they will want time to review their closing package before arriving at the closing table. These factors will all push toward eClose adaptation.

Yet eClose is not just for Millennials. Boomers and Gen-Xers fostered the technologies that make electronic mortgages possible. These, too, are the generations that learned to work in paperless formats. Most of these individual do not want to read large stacks of papers, nor do they want to be presented with a closing package, e- or otherwise, moments before they are expected to review and sign them. While Boomers and Gen-Xers will not buy as many houses over their lifetimes as the Millennials, they will remain important borrowers for several more decades, especially the youngest of these cohorts.

What Does It Take to eClose?

The CFPB report provides invaluable information on what it takes to eClose. The lenders and technologists in the pilot program were a mix of seasoned eClose veterans as well as those new to the process.

The report shares their experience preparing for the pilot and highlights three key success factors:

>> Commitment. Transforming an entire operation is a big endeavor. Big projects cost money, take time, and require focus. Those who have made the transition agree it takes the entire organization to make it happen. And it will not happen overnight; it is a months-long or year-long project to design, test and implement for all borrowers who opt in. Some will not, and, for those, paper closing processes must remain in place.

>> Collaboration. There are plenty of moving parts in every manufacturing operation. As with all manufacturing, it takes suppliers and partnerships to produce a finished product. The same is true in mortgage lending – especially with eClosing, since most lenders rely on a partner to close their loans. When working toward eClosing, close collaboration with settlement agents is crucial.

>> Communication. A natural extension of collaboration, regular and ongoing communication with the eClosing team is essential to a program that works. Expanding the definition of “team” is critical. The mortgage team should be joined by settlement agents, Realtors, and other staff members who interact with borrowers as well as others who influence the mortgage process.

The full report can be found at It makes excellent reading and provides valuable insight into what it takes to make the eClose transition.

When I read the final version, I came away thinking that an eClosing in which borrowers receive their closing package early, report a quicker closing, and feel more empowered, more knowledgeable and generally more satisfied has to be a good thing for the industry. When we’re closing the biggest, most complex transaction most people will ever engage in, and we’re doing it faster and making consumers happier, we’re doing the right thing. There’s no doubt in my mind that eClose is an idea whose time has come. Now lenders have to start thinking about how to make it happen.

About The Author


Lend Long And Prosper

Technology is changing faster than ever before. While it took 38 years for radio technology to reach nationwide adoption, it took Facebook just a year and half. Change is difficult, and this ever-increasing acceleration can be challenging to navigate.

This is certainly true for mortgage lenders. Most lenders’ loan origination systems looked very different five years ago than they do today. With so much at stake involved in lending in a compliant manner while providing a superior borrower experience, adaptability is essential. How can lenders successfully lead teams who require consistency through inevitable process and technology changes? There are two answers – one obvious, the other not so obvious.

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The obvious answer is leadership. While my background is in the study of human behavior, I now spend each day helping lenders plot major changes in their organization. My curiosity about people has led me to note a few consistent themes as lenders look to revamp their processes and change their loan origination technology providers. People can be naturally resistant to change, often preferring consistency, so how do we stay standing on the ship as technology shifts? There is a lot of great literature out there on the process of change management. The obvious and accepted part of the answer is that having a leader for your organization who can lay out a logical, straightforward plan (think Spock from Star Trek) for change is the starting point.

But people are, of course, emotional as well as logical beings, and emotion often gets left out of the plan for technology change.

That’s the second step in navigating change: Helping people deal with their emotions. While having a clear picture of the end goal is key, teams need to know why and how to get there, too. Captain Kirk said it best: “…the greatest danger facing us is ourselves, an irrational fear of the unknown. But there’s no such thing as the unknown — only things temporarily hidden, temporarily not understood.”

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Change, by definition, is a move away from the known into unknown. Our irrational fear translates into a fear of loss. It could be a loss of responsibilities (technology replacing manual processes or entire jobs) or a loss of comfort (sameness keeps anxiety and fear away). Teams must feel they understand the plan. They are the foundation through which our processes and technology can succeed, so leaders need to help them through their sometimes rational, sometimes irrational fears and emotions about technological change.

Helping people through change is actually quite similar to helping people through loss or grief. In fact, you may have seen all five stages in the Kubler-Ross model on loss: denial, anger, bargaining, depression, and acceptance. As a leader, how effectively you help your staff navigate through — or around — the first four could be the difference between excitement for the future and poison in the well.

In dealing with change, you can either lead from the front or from the back. Only the former will help you effectively navigate your staff through change. You’re removing that fear because the team sees you’ve already outlined the destination, and you’ve shown them the path to get there. No more pushing your staff into the stressful, scary unknown. You’re bringing them into something new, something greater. Change is a constant in business. It’s always going to be hard, but when it’s done right it can lead to gains, not losses.

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In This (Finally) Post-TRID World, What Comes Next?


Amanda-PhillipsFor over a year, it has been all TRID, all the time. As we pass the TILA RESPA Integrated Disclosures (“TRID”) implementation date, regardless of how prepared lenders are feeling, one thing is certain: TRID is happening. So now the question becomes: What is the “next big thing” for the industry?

Arguably, the next big industry change is the recently published Home Mortgage Disclosure Act (“HMDA”) final rule. The Consumer Financial Protection Bureau (“CFPB”) published a proposed rule amending Regulation C to implement amendments to the HMDA as required by the Dodd-Frank Act in August 2014. The comment period for this proposed rule closed on October 29, 2014, and the final rule was published October 15, 2015.

The current HMDA Loan Application Report (LAR) requires that specific data by specific institutions on specific loans be reported. The data collected and reported includes:

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>> Data on the loan application (application number, application date, loan type, loan purpose and the loan amount requested)

>> Action taken on the application (e.g. originated, approved or denied)

>> Reasons for denial (optional)

>> Date action was taken

>> Loan information (lien position and rate spread in some instances)

>> Property information (property type, occupancy status, property location by MSA, state, county, and census tract)

>> Applicant information (ethnicity, race, sex, and annual qualifying income)

Just as the Dodd-Frank Act mandated that the CFPB promulgate the TILA RESPA Integrated Disclosure rule, Dodd-Frank mandated certain changes to HMDA via Regulation C amendments; however, the CFPB expanded on the mandate requirements when they drafted their final rule. Section 1094 of the Dodd-Frank Act specifically required the CFPB to promulgate their rule to expand HMDA reporting to include total points and fee, rate spread for all loans, “riskier” loan features (for example, prepayment penalty or negative amortization), unique identifiers for loan originators and loans, origination channel (retail or wholesale), property value, more detailed property location information, the borrowers’ age(s), and the borrowers’ credit score(s).

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The CFPB met this obligation by adding data fields to the HMDA LAR as mandated by Dodd Frank, but went above and beyond their minimum obligations by modifying or adding over 30 data points. Some of the new and modified data fields required by the final rule are:

>> Debt-to-income ratio (DTI)

>> Combined loan-to-value (CLTV)

>> Which automated underwriting system (AUS) was used and the recommendation

>> Interest rate

>> Credit score

>> Applicant age

>> Total origination charges

>> Total discount points

>> Total lender credits

>> Property value

>> Units financed

>> Affordable housing/income-restricted housing information

>> Manufactured housing classification and land property interest status

>> Unique identifier for the lender

>> Removal of the option for denial reasons, making that data mandatory

While the additional data fields in the HMDA LAR are arguably the most significant changes imposed by the new HMDA rule, a close second are the changes in institutions obligated to submit that LAR data. Under the current HMDA regime, there are two different standards for institutions that must submit a HMDA LAR: one for depository institutions, and one for non-depository institutions. For depository institutions, several factors come into play when determining their obligation, including asset size and originating at least one home purchase loan or refinancing of a home purchase loan in the prior year. Under the new final rule, the threshold for the number of originated loans is increased to 25 closed-end or 100 open-ended covered loans in the preceding two calendar years for depository institutions.

Currently, for non-depository institutions, the major qualifying factors are whether the institution has a branch or home office in a Metropolitan Statistical Area (MSA), if at least 10% of its total origination dollars are from home purchase or refinanced home purchase loans, and if those home purchases or refinancings total $25 million or more dollars in the prior calendar year. Additionally, non-depositories have an asset threshold of $10 million or 100 or more home purchases or refinancings in the prior calendar year. Under the CFPB’s final rule, in addition to having a branch or home office in an MSA, a non-depository institution must file a HMDA LAR if it originated 25 or more closed-end or 100 or more open-ended covered mortgages in the two preceding calendar years. The definition of “closed-end” mortgages, under the final rule, includes closed-end reverse mortgages and home equity loans secured by a dwelling. This change dramatically expands the number of non-depository institutions that must collect and submit the data on a HMDA LAR each year.

Although most loan origination systems (LOS) collect a vast majority of the new data points already, the obligation to collect and submit this data could be a difficult undertaking for some smaller lenders. Even for those who already collect and store this information in their LOS, the enhanced need for accuracy imposed by the submission of the data to the Bureau is bound to increase costs to the business for personnel and likely technology or even outside legal, quality control, compliance and technology assistance.

The new data collection and reporting obligations will be especially burdensome – and unfamiliar — to those non-depository institutions that are new to the HMDA reporting process. Many of these institutions will not only be new to the process, but will be relatively small, requiring significant “spin up” on the staffing and data integrity responsibilities that come along with being a HMDA reporting lender.

For consumers, the additional data collected, such as FICO score(s) and property address, present privacy issues. The CFPB has indicated that there is sensitivity to this potential issue, but the industry remains concerned about consumer privacy.

It is also not clear what the CFPB will use this additional data in the LAR for, but there is plenty of speculation. The most popular speculation is that the CFPB will use the HMDA LAR data to pre-examine lenders for a Fair Lending exam. That is, the CFPB will analyze the new HMDA LAR for statistical evidence of Fair Lending violations. Combine this speculation with the recent United States Supreme Court ruling that Fair Housing Act claims can utilize the legal theory of disparate impact, and the HMDA stakes rise significantly.

The Court’s opinion regarding the legal theory of disparate impact, as applied to the mortgage industry under the Fair Housing Act in particular, means that lending practices that are not explicitly discriminatory, but that have a negative impact on minorities disproportionately as compared to non-minorities, can be found to have violated the Fair Housing Act. Now, let’s apply that theory now to the analysis of the expanded HMDA LAR data prior to ever setting foot in a lender’s office for a Fair Lending exam. The fear, warranted or not, is that examiners could potentially have a predisposed opinion of a lender based on data alone.

Under the new HMDA rule, establishing a robust Fair Lending Program is going to be essential for all mortgage lenders. This Program and the results of quarterly and annual reviews should be documented and retained. HMDA data should be tested for accuracy and completeness regularly. Analysis of the LAR for outliers should be completed on a quarterly basis and a full regression analysis conducted annually. It is also wise to have an independent third party conduct the annual regression and outlier file review. How much of the Fair Lending review is conducted internally and how much is outsourced will often be a question of pricing and resources.

Lenders may be able to conduct the quarterly self-assessment, minimizing costs to third party vendors, using specialized compliance technology that analyzes and reports on the statistical review of a lender’s HMDA data. Self-correction is as important as self-assessment. Any violations of the law or the company’s own Fair Lending policies and procedures should be self-corrected and documented for possible presentation to a regulator or examiner.

The new HMDA rule is upon us. While we continue to adapt to life with TRID, the industry needs to begin to refocus its attentions on what’s next, and HMDA and Fair Lending are the next candidates affected by reform.

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Here’s How TRID Is Going So Far…

As the MBA Annual conference wraps up in San Diego, one statement came up time and again: “Come back to us in 45 to 60 days, and we’ll have an answer for you on how things are going with TRID.” Mortgage technology vendors are guarded, and rightfully so. There are a number of factors at play in such a complex change, so time really will tell all. However, one loan origination provider was singing a different tune. Accenture Mortgage Cadence has already seen 37 of their customers draw packages with a Closing Disclosure included. This comes after the company spent over a year preparing, ultimately rolling the TRID-ready product releases out to customers ahead of the October 3rd effective date. Progress in Lending sat down with one of these lenders, long-time Accenture Mortgage Cadence customer, Crescent Mortgage Company, to discuss how their experience with TRID has gone. Here’s what happened:

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Q: When did you begin educating yourself and your team about TRID?

A: As we all know, this regulation was a long time in the making. We spent the past year making sure we were ready for the change, which meant educating our team as well as getting them prepared to educate our customers – both critical to our business. Accenture Mortgage Cadence offered monthly webinars on TRID, which we found tremendously helpful. They were not only educational on the rules and what they meant to us, but they spent many months keeping us in the loop on the specific product changes soon to be rolled out. This allowed us to focus on our business, knowing that our technology would be ready to support the changes. At the end of the day, getting ready for TRID was a large undertaking; proactive planning and execution were critical to our success.

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Q: When did you go live on the TRID-ready product release of Accenture Mortgage Cadence’s Enterprise Lending Center?

A: Accenture Mortgage Cadence took a unique approach to rolling out the product enhancements. Back in August, they deployed the first test version. This was meant to be a collaborative approach to the TRID rollout to help ensure we had ample testing time and could report any needed enhancements back well in advance of October. This method worked great and allowed us to feel as though we had a voice and helping hand in shaping the final release. Ultimately, we went live back in August, though were using the final version in September.

Q: What has life been like since October 3rd?

A: The product rollout approach and year of education previously mentioned were instrumental to our success. By the time October 3rd hit, the long-awaited deadline came and went with little issue. Sure, we have found items needing our attention as you always will when you are no longer testing “fake” loans. I’m sure this will continue to be the case for a short period of time. Accenture Mortgage Cadence has been proactive in their design for TRID and highly reactive when we have items that required their assistance. We’re now turning our focus to 2016 and continuing to grow our business in a compliant and profitable manner. My team did an amazing job in finding ways to focus on TRID as an opportunity to be innovative and to exceed the expectations of our customers. We now plan to execute on this opportunity in partnership with Accenture Mortgage Cadence. The best is yet to come…

Life After TRID

TRID has been all consuming for the past two years now. Top executives gathered at the Fifth Annual ENGAGE Event to discuss what happens now. What will the mortgage industry be like now that TRID is a reality?

Rebecca Walzak

Rebecca Walzak, founder of rjbWalzak Consulting

“I think we’re going to have regulation by litigation. The CFPB isn’t interested in lenders, they’re interested in the consumer,” answered Rebecca Walzak, founder of rjbWalzak Consulting. “So, lenders need to start thinking about how they interact with the borrower. A Peanuts character used to say, I love humanity, it’s people that I can’t stand. Similarly, lenders have to ask” What have I done for the consumer?”

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And make no mistake, TRID has been all encompassing. On the property preservation side of the business, big changes have been necessary said Tom Kalas, legal counsel for Five Brothers. “The regulations have forced us to change how we operate. We document more. We attend more onsite audits. It’s a lot more expensive to conduct business. And I think that things will get more intense in terms of new regulation and enforcement throughout mortgage lending.”

Tom Kalas, Chief Legal Counsel at Five Brothers

Tom Kalas, Chief Legal Counsel at Five Brothers

Even the appraisal sector has been touched by TRID. “The verdict is still out on the best way to handle appraisal fees now,” explained Jennifer Miller, president of Mercury Network. “With appraisal fees, you have a general idea. But now you have to know the fee. And remember, depending on the property type and the geographic location, the fee is different, which will impact your TRID disclosures.”

Jennifer Miller, President at Mercury Network

Jennifer Miller, President at Mercury Network

In the end, lenders have to demonstrate that they are making an effort to comply, said Amanda Phillips, senior legal and compliance lead at Accenture Mortgage Cadence. “Initial audits by the CFPB will focus on the lender’s intent to comply. From there, the fines will start.”

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“Going forward, the next big regulatory hurdle is going to be HMDA, according to Phillips. “HMDA is next for the CFPB. We all have to think: What are they going to do with that data? With all of that data at their fingertips they will have an informed opinion about the lender even before they walk in your office to perform that audit. So, lenders have to know their data and they have to be able to explain it.”

Amanda Phillips, Senior Legal and Compliance Lead at Accenture Mortgage Cadence

Amanda Phillips, Senior Legal and Compliance Lead at Accenture Mortgage Cadence

So, how does the industry cope with the CFPB? “We have to automate more, noted Walzak. “We need websites and other platforms to focus more on the consumer. We need to show them that we are out there for them. We need them to know that we are not going to put them into a loan that they can’t afford. We need to educate them about the process. We can’t fear the consumer, we have to use technology to both improve our process and become a trusted advisor.”

Technology To Enhance The Customer Experience

BBVA Compass has deployed an end-to-end mortgage software suite from Accenture to streamline the bank’s real estate lending operations and enable its clients with digital tools to apply for and track loans. Here’s why:

BBVA Compass is using Accenture Mortgage Cadence’s Enterprise Lending, Borrower, Imaging and Document Center software to support its 672 branches across the United States. The new suite includes a core loan origination system and an advanced set of tools for online origination, electronic imaging and automated document management.

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“The Accenture Mortgage Cadence software empowers our mortgage clients by giving them the information they need, whenever and wherever they are,” said Eduardo Castaneda, executive director of Real Estate Lending for BBVA Compass. “It also helps us respond nimbly and increase efficiencies in a changing regulatory environment.”

Castaneda said Accenture’s mortgage processing expertise and commitment to providing lenders with state-of-the-art technology was a key reason for the bank’s decision. “We have a long-standing relationship with Accenture, so we understand their core technology and mortgage processing technology capabilities,” he said. “We are confident this software suite will position us to meet the needs of our clients now and well into the future.”

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“As the mortgage industry evolves and consumers demand access to more digital capabilities, lenders that can adapt fastest will win,” said Terry Moore, senior managing director and head of Accenture Credit Services. “By embracing cloud-based systems and new lending innovations along with an industrialized mortgage processing solution, BBVA Compass continues to show foresight and market leadership.”

“BBVA Compass’ choice of our software suite is further evidence of our unique capabilities to assist banks in adapting their business to meet new and emerging consumer demands, as well as their need to lend more efficiently, profitably and compliantly,” said Trevor Gauthier, managing director of Accenture Mortgage Cadence.

Accenture Mortgage Cadence is a robust mortgage loan origination software suite that covers the full lending cycle from start to finish. Lenders can process, underwrite, close and fund loans virtually anytime and anywhere. The suite also includes the Borrower Center, a point-of-sale portal for customers that simplifies the loan application process and includes up-to-date information concerning the borrower’s pending application.

BBVA Compass is a Sunbelt-based financial institution that operates 672 branches, including 341 in Texas, 89 in Alabama, 77 in Arizona, 62 in California, 45 in Florida, 38 in Colorado and 20 in New Mexico, and commercial and private client offices throughout the U.S. BBVA Compass ranks among the top 25 largest U.S. commercial banks based on deposit market share and ranks among the largest banks in Alabama (2nd), Texas (4th) and Arizona (5th).

Transforming Customer Service Into An Agent Of Change

Every organization strives to serve its customers at a world-class level; however, taking customer service past the concept of a “help desk” is often an afterthought. Most companies view support as something similar to the 1990s Maytag commercials, where the lonely repairman is waiting for someone to call so he can spring to action. As a result, support is often seen as a cost — a necessary but basic function that does no more than resolve individual customer issues using entry-level employees.

I believe that this line of thinking is flawed. In my view, customer service can provide valuable insight into the organization and should be seen as an opportunity to collect data that will help drive improvements in lenders’ people, processes, and technology.

By the time an issue makes its way to the customer service team, it has typically affected the customer and has potentially damaged the brand. Many believe a fast response time and a satisfactory resolution can actually increase brand value. While this may be true in some cases, most complaints tarnish the brand and drive costs up. Also, because customers and staff were affected, it is likely that management and/or executive involvement is required to remedy the issue at hand. At Accenture Mortgage Cadence, we refer to this as the “cost snowball effect.” If issues are identified and addressed before they move to the next step, the cost is limited. If an issue is not identified and addressed, the cost to correct it snowballs as the number of individuals and teams involved increases. Taking steps to ensure customer service teams are properly versed in how to handle issues can help keep such issues from snowballing.

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As lead of the Accenture Mortgage Cadence service team, I have spent the last two years refining our support process. We have found that the customer-facing support group should not simply be a “help desk.” In today’s complex business environment, these teams cannot simply follow a series of scripted questions and responses and expect to resolve customer issues. Most issues require a highly capable individual with the authority and skills to resolve specific issues and refer others to the appropriate subject matter experts.

To resolve an issue in a timely and complete fashion, the support team also needs direct access to the organization’s subject matter experts. Customer service should be responsible for driving continuous improvement across the organization. They do this by seeking root cause, determining what needs to be fixed, and identifying what actions need to occur to prevent that specific issue from appearing again.

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In most organizations, support uses a ticketing system that includes varying amounts of data about the specific support incident. Typically there is a description of the incident, the potential resolution, and a field that classifies the type of incident that occurred. This data should be used in conjunction with feedback from support subject matter experts, looking at aggregated data to drive continuous improvement within specific individuals, teams, processes, applications and infrastructure.

Support within any organization should be viewed as much more than a cost factory. Instead, it should be viewed as a feedback mechanism that can drive continuous improvement throughout the organization. Properly structured, customer support should be an agent of change for people, processes, and technology.

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Five Key Ingredients For Successful Long-Term Lending To The Millennial Borrower


Terry-AikinWe’re halfway through 2015, and many lenders are still holding their breath waiting for the TILA-RESPA Integrated Disclosure rule (TRID) to go into effect. We all fear the unknown, but lenders can take rational steps to get ready for TRID by adjusting their lending, their lending strategies and improving existing processes. We make adjustments today to prepare for tomorrow.

I’ve traveled to a dozen industry events, listened in on the latest the CFPB has to say, and tuned in to how lenders are reacting to TRID. While many in the industry may want to close their doors and hunker down in preparation for TRID, the world around us does not stop because of an impending regulatory change. Many regions and cities continue to enjoy a robust real estate market and recovery, and with interest rates low but trending upward, many borrowers are actively in the market for a home. Instead of worrying about TRID, lenders should be turning their focus to ways to reaching the emerging Millennials market.

People, process, and technology remain the key to business success, but while this may be true at the most basic level, we all know that nothing about the mortgage industry has been simple or straightforward for many years. The recipe for success in today’s all-digital age is much more complex. Our industry faces uncharted territory; we are still transitioning from the all-time high of the refinance boom to the current reality of purchase lending and higher costs to close. This new lending environment presents us with new opportunities.

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One of the biggest opportunities is the arrival of the Millennials to the housing marketplace. Millennials are the next first-time homebuyers and the new face of lending. There are 86 million of them in the US, and they now represent the largest generation in the workforce. They cannot be ignored; rather, they should be cultivated. We see five key ingredients in the recipe for successful lending to Millennials:

Defined Goals. You must define measurable goals to achieve your future vision. Your goals should be unique to your target market and the strategy of the organization. This, along with any number of factors, will help you define and adjust your goals. Goals, such as increasing the number of loans made to Millennials, should be measurable and bucketed in near-term (1-2 years) and long-term (3-6 years) categories. If you cannot measure the goal, it’s a vision. Your vision belongs in another area of your plan — not under goals.

Measure your goals monthly, quarterly and annually. Consider: Cost-to-Originate, Cost-to-Close, and Gain-on-Sale (GOS) Leakage. GOS Leakage is the difference between the expected gain and actual gain on sales. A CMB colleague once explained to me that most lenders are unaware of this issue. Many mortgage lenders don’t know they have a problem because they don’t closely monitor changes in Gain On Sale. Often times this occurs when the investor’s lock price and margin are altered in a company’s loan origination system after the loan is purchased, often without a date- and time-stamp. In essence, someone changes the original lock price and GOS to match the figures on the purchase advice. If this occurs, there is no way to measure the difference. Pre-purchase or delivery issues can also cause delays in the loan purchase, which can result in extension fees or even having to resell the loan to another investor at a loss. There are several other sources of GOS leakage that result in a reduction of revenues. The key is to monitor each loan to ensure there is little or no difference in the expected and actual GOS.

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Strategy. Your strategy should be based on meeting your goals for the future. As mentioned, the industry we see before us is not at all like the industry we have known. The refinance boom we saw over the last few years appears to be a thing of the past. With new regulations in place and a rebounding purchase market, identifying the impact this has on your strategy is crucial.

As the industry changes, so may your strategy. Just like an endurance race, the key to winning typically isn’t in making broad, sweeping changes, but rather in careful preparation, making small corrections along the way, and tenacity. Consider and measure your market penetration. Whether you’ve reached saturation or are still expanding, home buying behaviors will change over the next couple of years.

The borrower experience throughout the process — whether digital, face-to-face, or over the phone — must be highly personalized to meet the needs of tomorrow’s consumers: Millennials and minority buyers. How will you get there? Mobility, integrating apps, and cloud systems could be an answer. A simple first step could be changing your website flow to make it more intuitive and adding online mortgage applications.

People. The foundation of any successful company, I would argue, begins with great leadership and the right people. Hire smart people that are culturally aligned with your organization and demonstrate the ability and desire to learn, and you’re on your way.

How do you measure or anticipate future performance to meet the needs of your business and lending strategy? You must ask yourself if you have the right people for the changing environment. Can they help you achieve your lending strategy? If the answer is yes, take steps to increase their knowledge and test it, and take actions to regularly demonstrate how “they” and “their role” are critical to the success of the department and organization. The Mortgage Bankers Association recently launched to help educate college students about the mortgage banking industry. Education and testing like this is a good place to start. Remember, Millennials aren’t only your soon-to-be customers, they are your current and future employees.

Cost-to-Close. As mentioned above, cost-to-close is simply the sum of mortgage labor costs, direct mortgage costs, indirect mortgage costs and mortgage technology costs divided by the number of closed loans. We all know what we want out of this. The lower the cost-to-close, the more profitable and competitive the lender will be. Study after study tells us the technology cost component is by far the smallest expense in the equation. Labor, in contrast, is always the largest. Lowering costs is a matter of leveraging the former, which, if done properly, reduces the latter, thereby lowering the cost of lending.

Market trends have a great impact on this measurement. Cost-to-close, for most lenders, is up this year over last year, due to the switch from a heavy refinance focus to a focus on the purchase market. Purchases are inevitably more complex and time-consuming. So how can lenders lower this measurement? High performance lending is dependent upon productivity. Add a new market — for example, by working more closely with first-time buyers — or gain new market share without adding staff, and your productivity will go up. Also, take a look at your internal efficiencies. Is your team inputting the same data multiple times due to disparate systems or redundant processes? Many redundancies can be found in manual compliance checks, imaging, and document production areas of the loan manufacturing process.

Technology. Technology is the great unifier. Mortgage lending has undergone a remarkable transformation over just the past decade. Mortgage lending has traditionally been a disjointed process, requiring interactions with multiple systems to close just a single mortgage. Lenders are now realizing these methods are antiquated. In order to see their cost-to-close go down, lenders need a system capable of getting borrowers to the closing table faster. Online is now where it’s at – especially as it relates to the all-digital Millennial borrower. Lenders not online are bound to miss out.

Lenders should make every effort to meet Millennial borrowers where they spend their time — on their phones, tablets, and computers. These lenders should be connected and innovative, finding technology that positions them for the upcoming all-digital mortgage revolution. Some mobile technologies can combine spending/saving psychology, behavioral science, location data, and other services (such as debit card and payments). This offers Millennial consumers real-time, context-based feedback on their daily spending levels and options for saving money, thus engaging them in a more compelling way. Buying behaviors are changing; the lender’s goals, strategy, and technology must also change to stay relevant in tomorrow’s all-digital mortgage lending environment.

I’ve spent nearly my entire career in the mortgage industry. One thing it has taught me is to expect and embrace change. We need consistent ingredients and careful measurements to benchmark our business success. No matter the ups and downs we may face in the years ahead, tracking to definable processes and measurements will allow lenders to know when something is working and when it is time to move in a new direction. Taking the right steps today positions lenders for success tomorrow.

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