Posts

Banking Compliance Index Holds Steady In Q3

The Banking Compliance Index (BCI) remained steady in Q3 2018, after nearly doubling from Q1 2018 to Q2 2018. The spike in regulatory activity from earlier this year demonstrates the significant impact of regulatory relief bill S.2155, which contained over 50 separate regulatory changes. Even though regulatory relief has been promised, financial institutions still have not experienced any regulatory lift.


Featured Sponsors:

 

 


“The sustained increase in regulatory activity compared to the beginning of the year reinforces that banks and credit unions have yet to feel any concrete relief resulting from bill S.2155,” stated Pam Perdue, Continuity’s chief regulatory officer. “During Q3, institutions were once again faced with reading, analyzing and interpreting a significant number of pages and regulatory material, costing too many resources and employee hours. This is simply too much burden for the typical financial institution to reasonably maintain with manual processes.”


Featured Sponsors:

 

 


The Banking Compliance Index, published quarterly by Continuity’s Regulatory Operations Center (ROC) quantifies the incremental burden on financial institutions in keeping up with regulatory changes. The typical community financial institution needed more than one full-time employee (1.05) just to keep pace with regulatory changes, not including the resources institutions are already dedicating to regulatory and compliance efforts.


Featured Sponsors:

 

 


There were 59 issuances delivered between July 1 and Sept. 30, 2018, on par with the 61 issuances the previous quarter. Compliance costs at the typical institution averaged $15,534, and 304 hours were required to comply per institution.

“The last quarter of the year is typically the busiest in terms of regulatory activity, and we expect that trend to continue as 2018 comes to a close,” Perdue explained. “To complicate matters further, the upcoming midterm elections have the potential to significantly shake up the regulatory landscape, prompting even more work for banks and credit unions. Bankers must find ways to stay proactive and automate large portions of their compliance management, or they risk falling behind. Savvy institutions are looking to regtech partners and technology to boost efficiencies, reduce employee time dedicated to compliance and streamline the overall compliance management process.”

Bogota Savings Bank Uses Tech To Enhance The Customer Experience And Gain Efficiency

We here at PROGRESS in Lending champion technology advancement. We like to report on success stories. As such, Bogota Savings Bank, a $650-million New Jersey-based bank, will move to Fiserv to streamline operations and better serve customers. In reaching its decision, Bogota Savings was especially drawn to the integration between Fiserv core account processing technology and key capabilities such as digital banking and payments, which will facilitate a streamlined user experience for both customers and employees.


Featured Sponsors:

 

 


“By integrating online banking, online account opening and other solutions with the core platform, Fiserv enables us to gain faster and better access to the information we need to deliver a superior customer experience and eliminate two-thirds of our existing third-party services,” says Kevin Pace, executive vice president, Bogota Savings Bank. “Having information available in one place and updated in real time helps our back office, marketing and frontline staff be more efficient as well.”


Featured Sponsors:

 

 


Bogota Savings Bank is looking forward to replacing inefficient manual processes and time-consuming batch operations with the customizable, real-time processing available in the DNA account processing platform from Fiserv. These new capabilities will enable the bank to stay in step with consumers who are looking to manage their finances as quickly and easily as possible.


Featured Sponsors:

 

 


“DNA offers a tremendous amount of flexibility and control over how we want to operate by providing access to all of its data fields,” Pace added. “No matter what we need to do, it seems there’s a way to do it – usually in minutes or hours rather than days or weeks.”

In addition to core account processing, Bogota Savings Bank will leverage a range of solutions from Fiserv for digital banking, debit processing, payments, source capture, item processing, online account opening, and more.

DNA is an open, real-time account processing platform built for collaboration. A modern platform developed using contemporary, standards-based components, DNA provides a 360-degree view of customer relationships and facilitates streamlined processes within the financial institution.

“Understanding where technology and consumer expectations intersect is essential to delivering innovative, intelligent capabilities that meet real needs,” said Todd Horvath, president, Bank Solutions, Fiserv. “By upgrading to contemporary technology Bogota Savings Bank is positioning themselves to deliver on their customers’ high expectations.”

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

QRL Leverages DocMagic’s eVault Technology To Purchase eNotes

QRL Financial Services (QRL), a nationwide provider of residential mortgage lending services for community banks and credit unions, has leveraged DocMagic’s eVault technology to purchase eNotes.


Featured Sponsors:

 

 


Implementing an eVault means QRL can increase new business by extending its reach to lenders that are ready to implement eClosings and sell eNotes. In addition to providing improved service, they will competitively position themselves for the future. The deal will make QRL one of the first investors outside of the GSEs to begin purchasing eNotes.


Featured Sponsors:

 

 


“QRL is a farsighted organization, and by implementing eVault technology now, they stand to capitalize on marketplace opportunities as eNotes continue to gain adoption,” stated Dominic Iannitti, president and CEO of DocMagic. “We tend to partner with early adopters like QRL, who will reap the benefits of their industry insight. We look forward to the success they realize by utilizing our eVault and supporting technology.”


Featured Sponsors:

 

 


Because QRL is using DocMagic’s SmartDocs, all documents retain a tamper evident seal to ensure data and document integrity. Using static documents, that don’t include SmartDoc transactional (XML) metadata, means some organizations have the difficult, costly and time-consuming task of confirming that data and documents are in sync.

“Offering a truly paperless solution is the future. Consumers will expect and demand a closing experience that is more timely, convenient and informative,” says Alex Rivera, managing director at QRL Financial Services. “QRL’s ability to purchase and service eNotes will allow the credit unions and community banks that we service to stay ahead of the technology curve as they compete with the larger institutions in the race to improve the mortgage experience.”

The solution will also create greater secondary market process efficiencies because of reduced cycle times. QRL will be able to fund faster with fewer post-closing document issues.

Planet Home Lending Launches New Digital Mortgage Assistant

To support the continued growth of its retail channel and provide an exceptional home loan experience to customers, Planet Home Lending, LLC, has launched a new digital mortgage assistant, Skymore by Planet Home Lending. Planet’s digital mortgage assistant leverages artificial intelligence to make home loans easy, convenient and fast.


Featured Sponsors:

 

 


“Consumers want smart technology, and they want access to smart home loan professionals,” said Planet Financial Group CEO and President Michael Dubeck. “Skymore by Planet Home Lending makes applying for a loan much easier and is enhanced by our mortgage loan originators. They have an equally important role as experienced advisors who can explain home loan options clearly and help customers make advantageous choices.”

Skymore by Planet Home Lending features:

>>Mobile Friendly – Customers apply and upload documents securely from any device, including their phones


Featured Sponsors:

 

 


>>Co-pilot Navigation Assistance – Borrowers can share their screen with Planet mortgage loan originators or processors to get help when they need it

>>Easy Asset Statement Collection – Securely connects to thousands of financial institutions making it easy to provide documentation

>>Smart Technology – Only asks customers questions relevant to their individual situation and loan application

>>Transparent Process – Tracks current loan status 24/7, automatically showing next steps for the consumer


Featured Sponsors:

 

 


>>Eco-friendly – Electronically delivers disclosures and loan documents and allows digital signatures

“We believe in making the home loan experience personal and transparent, and employing best-in-class technology to improve the home loan journey for our customers,” said Planet Executive Vice President of National Sales, Michael Lee, said. “Skymore by Planet Home Lending speeds borrowers through the process, freeing our mortgage loan originators to focus on giving advice and counsel. We’ll get you home is more than just our motto; it’s what we do.”

Founded in 2007, Planet Home Lending is a privately held, national residential mortgage lender with multiple business channels uniquely positioned to provide competitive products and services. The company is an approved originator and servicer for FHA, VA, and USDA as well as a Freddie Mac and Fannie Mae Seller/Servicer, a full Ginnie Mae Issuer and approved sub-servicer, and a Standard & Poor’s-and Fitch-rated special and prime residential servicer.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

FirstBank Puerto Rico Streamlines Operations, Automates The REO Process

RES.NET, a technology platform allowing mortgage bankers, investors, vendors, consumers and other parties to communicate around a real estate transaction, has successfully developed and deployed a Buyer’s Marketplace for FirstBank Puerto Rico. The new marketplace showcases the bank’s diverse portfolio of available assets and engages a much broader audience of potential buyers and investors than traditional tools available in the market. It was created in Spanish to accommodate the widest range of buyers.

Shortly after FirstBank Puerto Rico selected RES.NET as the operating platform to assist with the disposition of its OREO (other real estate owned) properties, the devastation from Hurricane Maria presented a new set of unforeseeable challenges for the bank and the island as a whole. The bank and RES.NET issued a call to action, expediting the development and deployment timeline, quickly launching the marketplace in its native language to contribute to the rebuilding efforts of the community.


Featured Sponsors:

 

 


“Following Hurricane Maria, it became urgently important to streamline the bank’s OREO process and workflow, while simultaneously enhancing the visibility of the bank’s available assets to a broader audience of potential buyers and investors,” said Bianca Torres Román, VP, FirstBank Puerto Rico. “Within just one month of launching the new Buyer’s Marketplace, the unique number of visitors seeking information on our available properties more than tripled. Today, we are now reaching prospective buyers not just in Puerto Rico and the immediate region, but across the United States as well.”

The custom buyer’s site features a diverse range of assets available including land, commercial, residential, multi-family, retail, apartment units and apartment complexes. The site translation into Spanish enables prospective buyers and investors to easily navigate and independently search properties by territory, municipality, ZIP code and price range. Features include multiple photos of properties including photos of the interior, highlighted features providing information on specific desirable amenities from pools, to views or topography, and the ability for buyers or investors to contact the bank directly and/or make an offer. Prospects can view the available properties, or by navigating through FirstBank’s site.


Featured Sponsors:

 


“Prior to partnering with RES.NET on the development of the Buyer’s Marketplace, we were limited in terms of the information and features we could highlight, as well as our ability to showcase a property,” Torres continued. “The traditional methods of marketing property in Puerto Rico are primarily through social media outlets, agent to agent exchanges and select online resources. Those methods have limited functionality, restricting the ability to upload photos, and in some cases, simply highlight a property’s specific location.”

In addition to the Buyer’s Marketplace, the bank has implemented RES.NET’s REO, Agent, Vendor, and Property Preservation portals to automatically track and manage its whole portfolio. Bank employees can now manage the entire process from the time a foreclosure has been conducted through the sale and closing to a new buyer. What was previously managed through a manual process has been improved through the automation of workflows, work cues, offer management tools and agent interaction, and notification features.


Featured Sponsors:

 


Torres added, “With RES.NET, the complete portfolio can be viewed via the dashboard, providing real-time data and a more holistic view of our assets. Having access to this data is invaluable and helps ensure we are positioned for success in the future. Launching the Buyer’s Marketplace in combination with deploying our operating platforms is a pivotal moment for the bank’s OREO success.”

“I am very pleased with the work we’ve accomplished together with the team at FirstBank Puerto Rico,” said Keith Guenther, CEO and founder of RES.NET, a wholly owned subsidiary of USRES. “It is the combined dedication of both our teams that allowed this large-scale development and implementation to occur in less than six months. We worked closely with the bank’s staff to scope and develop this customized marketplace to assist the bank in connecting with potential buyers within Puerto Rico, as well as outside of the territory. This visibility of its available assets to a broader audience is an important step in the rebuilding efforts. Any effort that reduces the probability these properties remain vacant ensures the future stability of the region.”
 

Tech Revolution Will Change Appraisals

Computershare Loan Services has released new data that suggest U.S. appraisers believe their industry is on the brink of significant change.

The top-rated provider of end-to-end mortgage operations recently asked its network of appraisers to share their experiences and views on a range of subjects, with the 400+ answers providing a snapshot of current industry thinking.


Featured Sponsors:

 

 


Although 35% of respondents said that they currently use desktop technology for at least a quarter of appraisals, twice as many (70%) said that they expected to deploy such methods for at least the same amount of their work over the next two to three years.

In addition, although only 12% said that desktop appraisals, which exclude a property visit by the appraiser that completes the opinion of value, represent at least half of their work now, 37% said they expect to undertake more than half of their role using desktop technology by 2020 or 2021.

The survey’s results form part of Computershare Loan Services’ white paper, Property Appraisals in 2020 – Embracing New Technology to Reinvigorate the Industry, which was released today.


Featured Sponsors:

 


Nick Oldfield, CEO at Computershare Loan Services, said: “Like many professions, property appraising currently faces some interesting challenges as well as the emergence of significant technological changes.

“However, our white paper shows that, by embracing new methods, whether desktop appraisals, cloud computing or the use of drones, the industry can dramatically increase its efficiency and overcome other issues, such as declining numbers and a shortage of new appraisers entering the industry.

“Interestingly, despite inevitable reservations about the nature of these changes, respondents to our survey seem to appreciate some of the benefits that new tech can bring.

“We’re looking forward to continuing to engage with our appraiser network and beyond on how the industry can best use new ideas and methods to improve standards – and the professional lives of appraisers themselves.”


Featured Sponsors:

 


The survey also revealed an appreciation of the need for greater education to prepare appraisers for change, with more than 60% of respondents saying that they support continuing education programs for desktop appraisals.

Although respondents expressed concerns about the effect that technological change may bring their profession, there was also pragmatism about the benefits, with more than 93% of respondents saying that they would like to see the appraisal software tools that are used for agency loans (Freddie Mac/Fannie Mae) made available to all appraisers.

Desktop appraisals can enable a smaller group of appraisers to conduct more jobs between them: particularly relevant when some sources estimate that the number of appraisers in the U.S. decreased by 21% between 2008 and 2017, and when nearly two-thirds of appraisers are over 50.

65% of respondents to Computershare Loan Services’ survey were over 50, and none were under 30.

Respondents rated higher fees as the most important change needed by the industry to attract “a new generation” of appraisers, rating “easier entry into the profession” second.

More than eight out of ten respondents said that their work was more efficient as a result of their use of digital cameras (92%), electronic databases (90%), computer forms (85%) and email (81%).

71% said that digital access to data, flood maps, public records and aerial or satellite imagery had been the technological development that had most helped improve their work, with 21% citing appraisal software enhancements, form filing and autocalcuation and 5% regression analysis, analytics, charts and graphs.

69% said that valuation and data analysis were more important components to appraisals than inspections.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Integration To Perform All Automated Reviews

QuestSoft, a provider of automated mortgage compliance software, now offers its end-to-end mortgage compliance platform to lenders using LendingQB’s cloud-based loan origination software (LOS). The integration helps lenders to automate mortgage compliance reviews by testing loans for HMDA, High Cost, All Federal/State/Local consumer regulations, as well as fraud and risk services prior to a loan’s closing.

With QuestSoft’s Compliance EAGLE’s proactive loan compliance tools and capabilities, lenders using LendingQB can save time and avoid costly penalties by testing every loan for full adherence to national, state and investor rules and regulations both pre- and post-closing. LendingQB has added all of Compliance EAGLE’s services in an “a la carte” menu, providing lenders a full array of compliance checks. Now, LendingQB clients can select from more than a dozen different services to order only the ones they need.


Featured Sponsors:

 

 


“Partnering with QuestSoft provides our lenders the highest quality loan reviews in an intuitive, flexible interface that takes the complexity out of compliance,” said David Colwell, president of LendingQB. “Working seamlessly within our web-based LOS, lenders can conduct Mavent reviews, conduct instant HMDA reviews, evaluate loans for fraud and risk while also testing for RESPA fee tolerances, verifying borrower information and ensuring compliance for settlement services.”


Featured Sponsors:

 


Compliance EAGLE automates the entire mortgage lending compliance process through a single platform, delivering increased speed, data integrity, and reporting capabilities. Additionally, as new regulatory guidelines are introduced to the mortgage industry, Compliance EAGLE automatically applies updates to maintain optimal compliance procedures.

LendingQB’s web browser platform provides mortgage lenders with core LOS capabilities using modern web-optimized technology, enabling robust integrations to other web platforms such as QuestSoft.


Featured Sponsors:

 


“The mortgage industry’s constantly evolving regulatory environment makes automated compliance essential for reducing risk and ensuring a high-quality loan portfolio,” said Leonard Ryan, president of QuestSoft. “Our strong relationship with LendingQB has been very beneficial to their customers and LendingQB’s expanded integration with Compliance EAGLE provides lenders a trusted tool for ensuring full compliance with the latest regulatory updates, applicable laws and secondary market guidelines.”

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

LERETA Selects Eric Christensen As Chief Strategy Officer

LERETA, LLC, a national provider of real estate tax and flood services for mortgage servicers, has tapped Eric Christensen as the chief strategy officer for the company. Christensen is responsible for product development, corporate strategy, marketing and M&A transactions.


Featured Sponsors:

 


Christensen, who most recently was the founder and managing director of Credit Data Solutions, has spent his career developing knowledge around financial software, predictive modeling and analytics, credit risk technology and decisioning software. His expertise extends in fraud management, competitive strategy, business planning, sales and marketing as well as risk management and regulatory relations.


Featured Sponsors:

 


“Eric’s deep and varied experience in the financial industry makes him perfect to help usher LERETA into a new era where technology and people help provide the best level of service to our customers,” said John Walsh, CEO of LERETA. “We welcome his knowledge and passion for bringing positive change to the industry.”


Featured Sponsors:

 


Before Credit Data Solutions, Christensen had different executive positions at several financial services companies, including Interthinx/Strategic Analytics, FICO, Fannie Mae, E*Trade and LoanPerformance/CoreLogic. In addition to his success, Christensen has a Certified Mortgage Bankers (CMB ®) designation through the MBA.

Experian, FICO And Finicity Launch New UltraFICO Credit Score

Experian, FICO and Finicity have launched a new credit score. The new score, called UltraFICO Score, leverages account aggregation technology and distribution capability from Experian and Finicity to help consumers improve access to credit by tapping into consumer-contributed data, such as checking, savings and money market account data, that reflects responsible financial management activity.


Featured Sponsors:

 

 


With UltraFICO Score, a consumer grants permission to contribute information from banking statements, including the length of time accounts have been open, frequency of activity, and evidence of saving, which can be electronically read by Finicity and combined with consumer credit information from Experian to provide an enhanced view of positive financial behavior.

Experian, FICO and Finicity estimate this new score has the potential to improve credit access for the majority of Americans and is particularly relevant for those who fall in the grey area in terms of credit scores (scores in the upper 500s to lower 600s) or fall just below a lender’s score cut-off.  Consumers who are relatively new to credit with limited history or those with previous financial distress that are getting back on their feet stand to benefit the most.


Featured Sponsors:

 


“This changes the whole dynamic of the lender and customer relationship,” said Jim Wehmann, executive vice president, Scores, at FICO.  “It empowers consumers to have greater control over the information that is being used in making credit risk decisions.  It also enables a deeper dialogue between the consumer and lenders to help both parties make better financial decisions.  It’s a game changer.”

The UltraFICO Score will launch as a pilot program in early 2019. The pilot is designed to validate the score and assess willingness of consumers to share financial data for a potentially higher score. Pilot participants were sourced across various lines of businesses.


Featured Sponsors:

 


The model developed by FICO will be implemented through Experian and integrated into a lender’s existing operational workflow. Borrower data will be aggregated through Finicity. The UltraFICO Score builds off of the framework of the base FICO Score, and is designed to reflect the same odds-to-score relationship so that the new score can be easily incorporated into lending strategies and origination, account management systems. The UltraFICO Score is slated to be broadly available to lenders mid-2019.

“As the consumer’s bureau, our goal is to help empower consumers and to give better access to credit for more consumers, all while promoting fair lending,” said Alex Lintner, president, Consumer Information Services, Experian. “Through this project, we’ve found a new way to use consumer-permissioned data that allows lenders to make better decisions and helps consumers gain access to credit.”

“This approach allows Americans to benefit from positive financial behaviors,” said Steve Smith, CEO, Finicity. “We are proud to have created a new way for consumers to share financial information, safely and securely so that a new UltraFICO™ Score can be created.”

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Risks Associated With Lender Downsizing

ACES Risk Management (ARMCO), a provider of enterprise financial risk management solutions, has released the quarterly ARMCO Mortgage QC Trends Report. The latest report provides loan quality findings for mortgages reviewed by ACES Audit Technology during the first quarter (Q1) of 2018. The report’s noteworthy findings include:

Featured Sponsors:

 

 
>> In Q1 2018, the critical defect rate increased from the previous quarter’s 1.68% to 1.72%.

>> As with the previous quarter, in Q1 2018, the majority of critical defects were attributed to the Income/Employment category.

>> Q1 2018 saw a 25% increase in the number of defects attributed to the Loan Package Documentation category—these defects are often associated with downsizing and understaffing.

Featured Sponsors:

 
>> In Q1 2018, the number of defects attributed to the Borrower and Mortgage Eligibility category dropped to 6.57%, roughly 50% of the previous quarter’s rate of 12.24%.

>> In Q1 2018, critical defects related to core underwriting and eligibility issues continued to be the most frequently occurring—which is typical in purchase-driven markets.

“The distribution of critical defects for the first quarter of this year differed significantly from those we saw during the last quarter of 2017,” said Phil McCall, ARMCO’s president. “What the report reveals is consistent purchase-dominant contracting markets. One of the newest trends is a spike in defects associated with loan package documentation. This is often a result of lender downsizing and staff consolidation, which occurs when declining loan volume becomes a trend—as it did in the beginning of this year.”

Featured Sponsors:

 
Defects associated with loan package documentation do not usually result in non-saleable loans. However, they can still have a detrimental impact on profitability. “These types of errors often occur when staff members are rushed or unfamiliar with job tasks. Omitting a document required by an investor or insurer is a typical example,” he said.

“Errors like this can cause investors and insurers to suspend loan purchases, which reduces warehouse line capacity and can result in pricing adjustments, both of which significantly impair profitability.”

The Q1 2018 ARMCO Mortgage QC Industry Trends Report is based on nationwide post-closing quality control loan data from over 90,000 unique loans selected for random full-file reviews, as was captured by the company’s ACES Analytics benchmarking software. Defects listed in the report are categorized using the Fannie Mae loan defect taxonomy. Each ARMCO Mortgage QC Industry Trends report includes easy-to-read charts and graphs, a summary that outlines ARMCO’s overall findings, a breakdown of defect rates for each Fannie Mae loan defect category, and a short conclusion. ARMCO issues a one-year analysis for the calendar year with each fourth quarter Mortgage QC Industry Trends Report.

“This quarter’s findings show how current data helps lenders protect profitability,” said McCall. “If lenders have had layoffs, or if they’re anticipating downsizing, they should know where and how it will impact their lending ability. Gaining access to this type of data helps eliminate the number one cost associated with downsizing.”