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Just Digitize Everything

I remember the late 1990s when everyone wanted to do an eClosing pilot. Everyone thought that eMortgages would blow up and go mainstream faster than you can imagine. Well, here we are over 15 years later and today everyone is talking about the digital mortgage.

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Maybe I’m old school, but to me it doesn’t matter what you call it, just do it. Lenders have and should automate and/or digitize every-thing. It just makes sense.

Why does it make sense? First, because higher interest rates and a slowing of refinances as a result demand that lenders be as efficient as possible. And interestingly, the higher rates are not scaring away younger borrowers that want a more convenient, digital process.

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According to data compiled by Ellie Mae, conventional loans remained steady at 64 percent of all closed loans by this generation, while FHA mortgages stayed at 32 percent—a market share they have held since June. The average loan amount for loans closed by Millennial borrowers in August of 2017 was $185,919, which was a slight increase from August 2016’s average $184,113, despite the average 30-year note rate having increased to 4.211 percent from 3.706 percent last year.

In August 2017, the average Millennial primary borrower was a 29.4-year-old who took out a Conventional loan of $185,919 to purchase a home with an average appraised value of $223,882. This average homebuyer had a FICO score of 724, which helped them get a 30-year note rate of 4.211 percent, and they closed on their home in 44 days. The majority (64 percent) of primary borrowers were male.

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Additionally, more than half (52 percent) of borrowers were married.

Overall, Millennials were most likely to close loans for the purpose of purchasing a home (87 percent). Refinances accounted for 12 percent of loans closed by Millennials in August.

And guess what? These borrowers want convenience. So, going digital will both make the lender more efficient and help them reach new borrowers. Beyond these benefits, going digital will also allow lenders to prove their compliance with new rules and regulations that is just not possible in a paper world. I’ll say it again: Going digital makes sense.

Some lenders may wonder: How do I get started? Going digital is actually much easier these days as compared to the late 1990s.

Why do I say that it’ easier? Because technology vendors are launching new solutions literally every day to help lenders digitize. For example, Capsilon, a provider of cloud-based digital mortgage solutions for mortgage companies, unveiled its vision for the future of mortgage production and servicing with the launch of the Capsilon Digital Mortgage Platform, powered by Intelligent Process Automation.

The new Capsilon Digital Mortgage Platform doesn’t replace a loan origination system (LOS). Rather, it integrates with leading LOS’s and uses Intelligent Process Automation to automatically complete key steps throughout the mortgage production process, from the initial loan application to delivery to investors. Unlike Robotic Process Automation, which uses computer programs to mimic simple manual tasks, such as data entry, Intelligent Process Automation uses contextual artificial intelligence to understand which documents, data and rules are required to accomplish key tasks at every step of the mortgage production process, and automatically completes these steps. Human intervention is required only for items that fall outside of established parameters.

And lenders are responding. “UWM shares Capsilon’s vision of how the mortgage industry needs to transform,” said Mat Ishbia, president and CEO of United Wholesale Mortgage. “We’ve partnered with Capsilon for years and think their technology has been key to helping UWM become the #1 wholesale lender in America.”

“The Capsilon Digital Mortgage Platform transforms the speed, user experience, and economics of the mortgage process,” said Sanjeev Malaney, CEO of Capsilon. “By leveraging Intelligent Process Automation, the platform transforms existing mortgage production and servicing processes into a modern digital factory.”

The point that I’m trying to make is that embracing a more digital mortgage process makes sense and the barriers to adoption are becoming few and far between. The real question should be: Why wouldn’t you digitize?

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.

A Time To Reflect

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In covering the mortgage space for more years then I’ll admit, I’ve always been concerned about how slowly this industry moves. In addition to moving slowly there’s this follow-the-neighbor mentality whereby lenders are hyper focused about what other lenders are doing because they don’t want to go first when it comes to doing anything new. There’s no self reflection it seems. If you’ll stick with me, I’d like to share this blog written by the head of my son’s school where he talks about the importance of self reflection:

“We focus on the outside world in education and don’t look much at inwardly focused reflective skills and attentions, but inward focus impacts the way we build memories, make meaning and transfer that learning into new contexts. So what are we doing in schools to support kids turning inward?”said Helen Immordino-Yang, Professor of Education, Psychology and Neuroscience, University of Southern California.

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“Here at Wooster School, reflection is a big part of what we do because we agree with Dr. Immordino-Yang, and understand that we learn more, and forget less, when we’ve had a chance to “think again,” “mull it over,” or even “sleep on it.” Like many an old adage, these express something we’ve always known to be true, but now also have the science to back up. Ever more frequently our teachers are providing the time for students to reflect in class, and are asking them to do so in many different ways. We take this time because we know that when done consistently and well it helps the learning stick.

“According to an article about Dr. Immordino-Yang’s and her research published by the Association for Psychological Science, “when children are given the time and skills necessary for reflecting, they often become more motivated, less anxious, perform better on tests, and plan more effectively for the future. And mindful reflection is not just important in an academic context – it’s also essential to our ability to make meaning of the world around us. Inward attention is an important contributor to the development of moral thinking and reasoning and is linked with overall socioemotional well-being.”

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As you develop self awareness when it comes to your total business, you become better able to make changes.

Now that lenders have begun to get a handle on their TRID-related defects, they should have more capacity to address other defects.

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“At Wooster School, we aren’t just talking about how schools can do a better job preparing our students to be better thinkers, learners, and people — or nibbling around the edges of the same old curriculum with the same methodologies — we’re taking the science and putting it into action. Our Days of Reflection, like the one we are having this year, are an opportunity for students and faculty to reflect together about some bigger picture goals related to skill and disposition development. They are also a great time for community dialogue about our shared struggles and successes. As faculty members, we are always impressed with the depth of thinking that happens on these days, and how willing these digital natives are to slow down and think about their aspirations and progress. Students have fun with it, and they learn from it. They also like the crumbcake we serve. And yes, I’ll have a big piece too. As I said, no nibbling around here.”

Why did I share that blog? Well, I thought it would be educational. It was interesting to me that an educator was talking about the power of reflection and critical thinking. I’m just not sure that goes on too much in mortgage lending, and that’s a shame.

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Case in point, the industry had a knee-jerk reaction to the recent TRID requirements. Instead of reflecting on how to make the entire mortgage process better, most lenders were just looking to comply with the rule and some were totally dependent on their LOS to ensure compliance. That’s not how it should be, and the results reflect the industry’s poor efforts.

ARMCO reported that after peaking in Q1 2016, the overall industry critical defect rate dropped to 1.63 percent in Q2, ending an upward trend spanning the previous three quarters. Defects in the Legal/Regulatory/Compliance category also waned in Q2, comprising 34 percent of all defects reported and marking the first decline in nine months. However, this category still represents the largest reported defect category.

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As an industry, we all have to be more self aware so we can adapt to constant change.

While TRID-related defects are still driving the majority of Legal/Regulatory/Compliance defects, we’re seeing a decline in defects in this category.

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“While TRID-related defects are still driving the majority of Legal/Regulatory/Compliance defects, we’re seeing a decline in defects in this category as a result of corrective action planning lenders undertook through the first six months of 2016,” said Phil McCall, COO for ARMCO. “As lenders determine the most effective strategies for addressing TRID-related defects, we expect to see this category decline further.”

Loan Package Documentation defects increased slightly in Q2, accounting for 26.7 percent of reported defects in Q2 versus 26.4 percent in Q1. Also of note is the increase in defects reported in credit-driven categories in Q2. Income/Employment leads this group as the third most frequently reported defect category in Q2 at 9.8 percent, followed by Borrower and Mortgage Eligibility at 8.9 percent and Assets at 6.8 percent.

“Given the magnitude of compliance-related defects lenders were facing in Q1, it’s not surprising to see upticks in other areas,” said Avi Naider, CEO for ARMCO. “Now that lenders have begun to get a handle on their TRID-related defects, they should have more capacity to address those credit-related defects. Thus, we should see those categories normalize in Q3.”

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See what I mean? It took the industry so long to comply with TRID before they finally turned to a smarter, more automated approach that is just now driving down TRID-related defects. I have two questions: Why did it take the industry so long to get to this point? Why are TRID defects still high? The answer is simple: There is a lack of true self reflection.

As an industry, we all have to be more self aware so we can adapt to constant change. When you think about it, self awareness is about having a clear perception of your personality, including strengths, weaknesses, thoughts, beliefs, motivation, and emotions. Self awareness allows you to understand other people, how they perceive you, your attitude and your responses to them in the moment.

We might quickly assume that we are self aware, but it is helpful to have a relative scale for awareness. If you have ever been in an auto accident you may have experienced everything happening in slow motion and noticed details of your thought process and the event. This is a state of heightened awareness. With practice we can learn to engage these types of heightened states and see new opportunities for interpretations in our thoughts, emotions, and conversations. Having awareness creates the opportunity to make changes in behavior and beliefs.

As you develop self awareness when it comes to your total business, you are able to make changes in the thoughts and interpretations you make. Changing the interpretations in your mind allows you to change your actions. Self awareness is one of the attributes of Emotional Intelligence and an important factor in achieving success.

Self awareness is the first step in creating what you want and mastering your business. Where you focus your attention, your emotions, reactions, personality and behavior determine where you go in life. Having self awareness allows you to see where you are and where you need to go. Until you are aware in the moment of your thoughts, emotions, words, and behavior, you will have difficulty making changes in the direction of your business. This industry has to be more self aware.

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.

Gaining Perspective

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Ten-X, an online real estate transaction marketplace, reported a slight decline in February existing home sales. According to the company’s nowcast, February sales will fall between seasonally adjusted annual rates of 5.34 – 5.69 million, with a targeted number of 5.51 million – down 3 percent from NAR’s reported January sales yet up 7 percent from a year ago.

“At some point, rising prices, higher interest rates, and limited inventory will begin to take their toll on home sales,” said Ten-X Executive Vice President Rick Sharga. “While online search activity remains strong, indicating healthy demand for homes, the relatively weak numbers in both new home sales and pending sales of existing homes suggest that buyers may be having trouble finding properties. But monthly housing numbers are notoriously volatile, so it’s too soon to say whether we’re seeing an inflection point, or the market is just taking a breath before coming back strongly in the spring.”

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Sharga has appeared on the CBS Evening News, NBC Nightly News, ABC World News, CNBC, Fox Business, Bloomberg, CNN and NPR. He has briefed government organizations such as the Federal Reserve and Senate Banking Committee and corporations like JPMorgan Chase, Citibank and Deutsche Bank.

The National Association of Realtors (NAR) recently reported that existing home sales saw strong growth in January, confirming the uptick the Ten-X Nowcast had previously indicated and even slightly exceeding those expectations. Existing home sales rose to a seasonally adjusted rate (SAAR) of 5.69 million units, up 3.3 percent from December and 3.8 percent from a year ago – its highest level since February 2007.

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The NAR also recently reported a 7.1 percent year-over-year increase in median existing home prices to $228,900 in January. This increase marked the 59th consecutive month of annual gains and also confirmed the nowcast prediction made in January. The February Ten-X Residential Real Estate Nowcast predicts that median existing-home sales will continue to make annual strides in February, falling between $220,056 – $243,220 with a target price point of $231,638 up 1.2 percent from January and up a substantial 9.9 percent from last year’s NAR figure.

The Ten-X Residential Real Estate Nowcast combines industry data, proprietary company transactional data and Google search activity to predict market trends as they are occurring – weeks before the findings of other benchmark studies are released. Building upon the groundbreaking work by Google Chief Economist Hal Varian, Ten-X’s nowcast model extends a traditional autoregressive-forecasting model to incorporate contemporaneous information that provides significantly enhanced accuracy.

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“The data shows that the refinance market has been slowing, so if rates go much higher it’ll come to a screeching halt,” Sharga noted. “In terms of fair lending, automating may be the answer. Technology is cold and blind so it can’t discriminate.

“However,” Sharga cautions, “there is a contingent that thinks technology is a panacea that will solve all of our problems and there’s another group that believe technology will never improve what I do because my way is the best way. We need better tools, technology and systems in place overall. Technology is not a fix-all, but anyone that thinks we won’t see more and more technology improve our market is misguided.”

Lenders underestimate the cost and time of implementation of new technology. They also underestimate the disruption technology with cost operations,” added Dr. Rick Roque. “Nonetheless, the Digital Mortgage is the only way to get more done with fewer resources.”

Roque is president and founder of MENLO, a firm that advises mortgage lenders on their M&A strategies. Moving forward he believes the mortgage industry will be more automated and less regulated. “I’ve met with several commissioners in a few states and they don’t see many changes in terms of regulatory enforcement. The role between the CFPB and the states is similar to the role of the FBI and the local police. They will come in with a chip on their shoulder and not share their data or practices. That dynamic won’t change. However, I do think this administration is determined to cut regulation and we are seeing lenders more focused on automation.”

But investing in technology isn’t always easy. “When you are evaluating technology you shouldn’t just look at that new and shiny object out there,” advised PCLender President Joe Langner. “You need flexibility. Lenders may invest in a new technology to solve this one problem, but that one thing that changed is going to change again. So, lenders need to look more broadly and you need to be able to invest in technology that can be modified on the fly if things change.”

Langner is a highly accomplished executive with 25+ years of senior level sales, marketing and general management experience, ranging from start-ups to $900-million business units. He has held executive and C-level positions with Sage, Ellie Mae and Dun & Bradstreet.

Moving forward, there will also be policy changes, warns Langner. “The government is buying all these securities. If that slows, which most expect that it will, that will have an impact. Also, changes to critical forms will cause some disruption this year.

“Any time you change major forms it gives lenders cause to look at their business and how they do things. At first compliance increases cost. Companies will add new checks and balances around what you need to do to comply because can be ambiguous at first. So, costs will go up and, with volume decreasing this year, you can expect lenders to do some layoffs,” he concluded.

If we put all this into perspective, as the title of this article suggests, we have a good idea of how things will proceed, generally speaking. “There are three areas where we’ve heard the president come down,” noted Sharga. “First, he has talked about getting rid of the mortgage deduction. Second, the general premise is that the regulatory environment will be relaxed, which should help the industry. Third, is the notion of unwinding the conservatorship of Fannie and Freddie. There has been talk of privatizing them. This is where we’re going as an industry. Moving forward, technology will play a vital role in how lenders adapt.”

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.

Industry Hot Topics

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I usually discuss a given topic that’s in the news or top of mind for me each month, but this month I want to switch it up a bit. Why just talk about one topic when there are so many topics to tackle.

For example, regulatory risk is a chief concern today in terms of both compliance and the increasing cost of compliance cutting into profit margins. So, what one or two compliance issues that are most important today? Are there other compliance risks that lenders should be aware of or preparing for?

“As a marketing company, we see a lot of concerns. There is defragmentation in mortgage marketing,” said Mary Beth Doyle, co-founder of LoyaltyExpress. “CFPB is coming down hard on what can be said, it’s getting heavily controlled. However, it is difficult for organizations to get streamlined so they are compliant.”

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LoyaltyExpress is a one of the nation’s largest providers of marketing automation and cloud-based CRM solutions for mortgage companies and banks. The company’s solutions enable lenders to automate marketing campaigns and easily manage customer, partner and recruiting data, while streamlining marketing activities, such as email, direct mail, print and gift fulfillment. This integrated approach enhances compliance by eliminating the need to share sensitive customer data with multiple vendors while ensuring that loan officers only use preapproved marketing materials that comply with regulatory guidelines.

“When we talk about the cost of compliance, there has been a psychology to recruit the a-team and let them go at it,” noted Doyle. “So, it’s a cultural change when the CFPB now places constrains. Having the controls in the system to keep communication automated and consistent is critical.”

Marketing isn’t the only sector to be impacted by skyrocketing regulation, the appraisal sector has been impacted, as well. “The regulations and compliance issues around appraising have skyrocketed,” said Jeffrey J. Bradford, founder and CEO of Bradford Technologies, Inc. “For example, the term ‘desirable’ can’t be used by an appraiser anymore because that’s subjective. There is a reliance on data and being factual. The fear of being sued or having to buyback a loan is amazing and it’s causing a lot of money to go toward appraising.”

Bradford Technologies is an innovator of valuation tools and solutions for residential appraisers. The company pioneered computer-aided appraising, was the first to incorporate statistical support in both mainstream and alternative valuation products, and currently provides one of the most adopted technologies for residential appraisers. AppraisalWorld, the company’s online appraiser community with over 20,000 members provides services focused on building trust and reliability in the appraisal industry.

The answer to maintaining compliance is consistency and accuracy, according to Ann D. Fulmer, a senior industry advisor for FormFree Holdings. “We hear a lot that loan officers are resistant to technological change that would protect the lender, but limit them. Another consideration down the road, to the extent that LOs are loosey-goosy, you open yourself up to fair lending issues. You have to defend yourself and your decision-making when you approved that loan.

“So, ask yourself: Are your decision-making processes consistent? Just because you can show that what you did was an industry standard, that doesn’t mean that you can’t be sued. The biggest risk to the industry is the lack of clarity around the new CFPB rules. Until the CFPB gets clear about what it expects and how they are going to enforce those rules, it’s paralyzing.”

“From a TPO standpoint, the paranoia ratchets up because you have to know who you’re doing business with,” added Gregory J. Schroeder, president of Comergence Compliance Monitoring, LLC. “If you are a small- to medium-sized lender you are in a crosshair because what do you do? You have to ensure compliance without destroying your profit margin. The CFPB has not targeted the smaller lenders yet, but it is coming.”

Comergence Compliance Monitoring, LLC, is a SaaS provider of vendor management solutions, currently focused on third-party originator and appraiser risk. Comergence provides lenders and appraisal management companies with tools that review and continually monitor registered mortgage loan originators and appraisers.

In the midst of all this change it’s important to assess and re-assess how you as a lender are handling this change. “Lenders are trying to do everything at once,” said Fulmer. “The CFPB was intended to protect consumers, but they are actually hurting consumers because there’s a lot of confusion.”

Doyle added that “there are state guidelines as well as federal guidelines to deal with. So, there’s a lot of interpretation to be done for sure. There’s such panic and intensity around compliance. You need to have a full audit trail to at least prove that you are trying to comply. And of course the consumer is hurt because these organizations are so paralyzed by how to interpret the new rules.”

Compliance aside, another hot topic is appealing to Millennials to both enter the mortgage industry as workers and homebuyers alike. “I have a daughter that is a Millennial, shared Bradford. “She wants to work for an employer that is having a social impact. They care about the climate, the world and the environment. There used be 2,000 appraiser trainees, now we only see a few hundred. You now have to have a college degree and many hours of experience to be an appraiser, which makes it economically unfeasible for people to get into the appraisal industry.”

In addition to Millennials turning their back on becoming an appraiser or loan officer, they’re also increasingly turning their back to homebuying, as well. So, how should the industry behave to get this group of people to want to buy a home?

“The challenge is really providing a program to help these young people get into a home given that they are already carrying so much debt in the form of student loans,” answered Doyle.

“I don’t think you can entice these guys to buy a home,” pointed out Bradford. “They want to be mobile and live in the trendiest places. If you could refinance their student loans it might entice them to do other loans with you.”

As we can all see, lenders are facing a number of challenges, but there’s one area that gets less attention than it should: oversight of third-party relationships and vendor management. “Recent regulations driven by Dodd-Frank have made managing these relationships even more critical,” reported Schroeder. “Lenders aren’t just being held legally accountable for their own actions, but for the actions of all the third parties with whom they do business. That includes not just third-party originators but other parties as well, including appraisers and software providers. We’re also seeing that originators are facing demands for more information and documentation each time they decide to apply to a new wholesaler.

“In addition, lenders that allow borrowers to shop for third-party settlement services have legal responsibility under the CFPB’s new regs in case those providers do harm,” continued Schroeder. “It’s clear that mortgage lenders must have an effective process in place for managing their service providers. But how do you keep track of what your vendors are doing in a cost-effective manner while staying focused on your own business? It can be an overwhelming task.”

So, how does the lender stay ahead of all of these issue? Many see the answer in artificial intelligence and smart technology. Let me leave you with this thought: Technology will never replace a human, but if programmed well, it can standardize the process and increase accuracy and efficiency all at the same time.

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.

Learn From The Politicians

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TME-TGarritanoPoliticians say the craziest things. Just look at the comments made by some of the 17 Republicans running for President. It’s out of control really. However, mortgage technology vendors should take notes about what not to do from these blowhards. Here are five things to avoid:

Don’t Complain. Nobody likes to deal with someone that continually makes excuses for shortcoming. Here’s what I mean:

“Can you imagine, if after the bridge investigation began, I came out and said ‘Oh, I’ve done all my business as governor on a private email server. And, I’ve deleted now 30,000 of those emails. But trust me none of it had to do with the bridge.’ Give me a break,” Chris Christie said to CNN.

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But the only email he provided to the Legislature last year came from his private Yahoo account. Christie turned over just one set of emails to the New Jersey Legislature in response to its subpoenas about Bridgegate. That email conversation contained edits that Christie made to a statement announcing the resignation of Port Authority official David Wildstein, who has since pleaded guilty for his role in the lane closures.

Democratic Assemblyman John Wisniewski, who led the investigation, told WNYC that Christie sent those emails in December 2013 from his personal Yahoo account. The public documents had previously been released but the email address was blacked out. Don’t complain when you’re doing the same thing yourself.

Similarly, Carly Fiorina’s campaign slammed CNN and the RNC, accusing both of them of “putting their thumb on the scale.” She’s complaining about being shut out of the debates.

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“If the RNC won’t tell CNN to treat post-debate polling consistently with pre-debate polling, they are putting their thumb on the scale,” Fiorina spokeswoman Sarah Isgur Flores said in a press release.

Flores ratcheted up the attack even further during an interview on Fox Business.

“This is the status quo trying to protect the status quo, trying to protect their power, their prestige, and so they want the same people on the stage as before, and they’ve set up a system that will do that,” said Flores. In the end none of this complaining is going to get Fiorina into the debate.

Too often I hear technology vendors complain about the lack of media coverage that they get or the fact that certain vendors are always in the news. Don’t complain about media coverage, form good relationships with the media so they cover you more.

Don’t Namedrop. You just don’t speak ill of the competition because you end up looking bad. For example Rick Perry blasted rival Donald Trump in the harshest terms — even comparing him to a “cancer” and “false prophets.”

“Let no one be mistaken – Donald Trump’s candidacy is a cancer on conservatism, and it must be clearly diagnosed, excised and discarded,” Perry said, according to a transcript of his prepared remarks. “It cannot be pacified or ignored, for it will destroy a set of principles that has lifted more people out of poverty than any force in the history of the civilized world – the cause of conservatism.”

Similarly, George Pataki also called out Trump directly. Former Pataki slammed fellow Republican presidential candidate Donald Trump, who he said has been “disrespectful” toward Latinos with recent disparaging comments about Mexican immigrants.

“Yes, clearly, they’re disrespectful,” Pataki told Business Insider of Trump’s comments in a brief interview before the annual New York Republican Party’s gala.

Trump characterized Mexican immigrants in his campaign launch speech as “rapists” and drug runners when talking about how he’d focus as president on reducing illegal immigration. What happened to both Perry and Pataki? They sunk in the polls.

If you are a mortgage technology vendor don’t slam your competitors by name. You need to clearly articulate your value proposition, not waste time talking down about others.

Don’t Over-Generalize. Lenders want specifics. Speaking of Trump, the king of over generalizing is Donald Trump. When it comes to immigration he says building a wall will solve everything, and that Mexico will pay for the construction of the wall. When pressed about what to do with illegal immigrants in the country already, he said that he would round them up and send them home. How would he accomplish this? By hiring good managers. Obviously this is an over generalization that won’t solve the real problem.

Women make up a large voting block and Trump is not doing well among women so he over generalized again. “I will take care of women’s health and women’s health issues better than anybody and far better than Hillary Clinton, who doesn’t have a clue, “ he told reporters after an afternoon rally. Notice that he doesn’t give any specifics? As a mortgage technology vendor, you can’t just use buzzwords and acronyms that you think people want to hear to sell your product. You have to know your solution’s specific value proposition.

Don’t Pander. You can’t tell lenders what you think they want to hear, you have to clearly articulate your value propositions. Politicians tell people what they think they want to hear instead of the truth and they suffer for it all the time.

Former Florida Governor Jeb Bus changed his position on the Iraq War three times in the same week. In his clearest declaration yet on his feelings about his brother’s invasion of Iraq, Jeb Bush said that “knowing what we know now, …I would not have engaged.”

“I would not have gone into Iraq,” he said. But earlier in the week he told Fox News that he would have engaged, then he tried to backpedal because he knows that public sentiment is not in favor of the Iraq War.

Wisconsin Governor Scott Walker did the same think when talking about birthright citizenship. In the end Walker said, “My point is any discussion that goes beyond securing the border and enforcing laws are things that should be a red flag to voters out there who for years have heard lip service from politicians and are understandably angry.”

That’s a far cry from how the Wisconsin governor answered the same question last Monday. “Yeah, absolutely,” Walker said when asked by an MSNBC reporter at the Iowa State Fair whether he wanted to end birthright citizenship. The bottom line is that you should learn from these politicians and just tell it like it is instead of delivering falsehoods to make your system sound better.

Don’t Exaggerate. Nobody likes a person who stretches the truth and goes over the top. To this end, many politicians have exaggerating the impact of the nuclear agreement with Iran. Presidential candidate Mike Huckabee called the Iran deal “idiotic,” and likened it to events of the Holocaust, saying that President Barack Obama will ultimately “take the Israelis and march them to the door of the oven.” The Iran deal might not be perfect, but comparing it to the Holocaust is just wrong.

Politicians make the same exaggerated claims about the Affordable Care Act. Ted Cruz gave an impassioned speech on the Senate floor, a few hours after the Supreme Court ruled 6-3 to uphold the Affordable Care Act’s subsidies nationwide. The senator from Texas, who is also running for president, called the decision “judicial activism, plain and simple.”

“Today, these robed Houdinis have transmogrified a federal exchange into an exchange, quote, ‘established by the State,'” he said. “This is lawless. As Justice [Antonin] Scalia rightfully put it, without objection, words no longer have meaning.” Another crazy exaggeration.

If you’re a mortgage technology vendor, speak honestly and frankly with lenders. Don’t tell them that your system does things that it doesn’t. Exaggerating will only get you in to trouble.

I hope you learned a lot about what not to do from these politicians.

About The Author

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

Doing The TRID Shuffle

The TRID deadline has come and went and we are all still here. We saw a mad dash on the part of mortgage lenders and technology vendors alike to comply with this new rule. They all danced around, did a little shuffle and by now everyone has found a dance partner.

It all reminded me of a prom. The technology vendors did there best to comply and stand out so they’d be picked to escort the most lenders to the dance. And in fact, lenders did make their choices.

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For example we heard that PHH Mortgage (PHH), one of the largest providers of residential mortgages in the United States, signed a multi-year license agreement to use DocMagic’s expansive set of products to help ensure compliance with the TILA-RESPA Integrated Disclosure (TRID) rule.

“We have worked closely with DocMagic for the last year to thoroughly evaluate, test and integrate their technology and compliance solutions, and we will use various components to ensure we are TRID compliant,” said Eric Sadow, chief compliance and fair lending officer. “We are confident that our use of the DocMagic technology and compliance solutions will meet our needs and the needs of our clients, regulators, investors, partners and borrowers.”

Did you get that? PHH worked on TRID for a year. Why? “Anyone working on TRID implementation will tell you that there have been many unexpected challenges,” said Gregory E. Teal, president and chief executive officer of Ernst Publishing. “We wanted to go live as early as possible so lenders can begin using the tool and testing their processes ahead of the CFPB’s deadline. I’m very proud of our team for getting everything together so quickly. The system is available now for lenders to use.”

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Ernst programs process an average of 150 million real estate transactions every year, industry-wide. Since the company was founded 26 years ago, Ernst has processed over 1 billion transactions. The firm estimates that its patented technology is in use for 90% of the nation’s new loan originations and refinance transactions.

Smart technology vendors not only helped their clients comply, but they also offered training. For example, Ellie Mae launched its Resource Center online for lenders to take advantage of the complete library of help resources.

“Our goal is to help mortgage lenders of all sizes feel prepared and confident for the RESPA-TILA Integrated Mortgage Disclosure Rule on October 3rd and beyond,” said Jonathan Corr, president and CEO of Ellie Mae. “We are able to offer comprehensive resources and training to help our customers prepare for this major change and we’re adding new resources to respond to feedback and concerns.”

“TRID rules are complex and affect all of the financial loan institutions’ – both originators and servicers – federal and state compliance tests; RxOffice allows users to ensure their processes are compliant,” added Andrew F. Campbell, counsel with Ober|Kaler. “Once the loans are run through the system, lenders or the servicers can immediately know if they are compliant or not and they can also know what they need to do to fix it so that they can be compliant.”

IndiSoft partnered with Ober|Kaler earlier this year to provide guidance and assistance to IndiSoft in enhancing two of its compliance modules, RxOffice Vendor Management Portal and RxOffice Compliance Portal, on all the current regulatory compliances.

“The industry is in a constant flux when it comes to regulations,” said Sanjeev Dahiwadkar, IndiSoft CEO and president. “Our platform and specifically our compliance modules make it easier for users and the executive management to keep up with the current compliance mix of its portfolio and help them in making right decisions. This gives them peace of mind and saves them the time, money and effort of trying to decipher complex regulations on their own.”

What’s my point in rehashing all this? My point is that this is a testament to this industry’s ability to tackle tough challenges. Now that the challenge of TRID is over I challenge lenders and vendors alike to do even more. Let’s move beyond TRID and really think about how we can improve the whole mortgage process. The CFPB hasn’t told us to do this, but why wait for them?

About The Author

[author_bio]

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

The Broader Impact Of TRID

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TME-TGarritanoAs the TRID deadline approaches we are all wondering what the industry impact will be. Will it be Armageddon? Or will it be a blip? One thing is for sure, the industry is grateful that the CFPB delayed the deadline from August to October.

“The level of complexity makes readiness hard,” said eLynx President and CEO Sharon Matthews. “We are ready, but the lender has to be ready, and other parties have to be ready, as well. The CFPB should have a parallel deployment that starts before October so lenders can test and use the new disclosures early to truly know if they are ready, that would increase the quality of the outcome once it’s mandatory.”

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eLynx recently launched an updated version of Expedite, its cloud-based platform for managing and delivering all loan documents. This release will enable lenders to comply with the CFPB’s upcoming TILA-RESPA Integrated Disclosures (TRID) rule. Expedite is used by thousands of lenders and settlement services providers across the industry.

New functionality includes:

>> Full document generation of Loan Estimate and Closing Disclosure documents;

>> Direct bi-directional integration with third party fee providers and title production systems that automates the collection of fee information from different sources;

>> Data extraction service that eliminates the need for manual data entry even when direct integration between lenders and settlement agents is not possible;

>> Fee determination features that allow lenders to compare the fees side-by-side, select the appropriate fees to include in the Closing Disclosure and document the different fees and actions in a fee reconciliation report;

>> Real-time alerts when there are potential compliance issues;

>> A fully integrated audit trail that documents TRID compliance; and

>> Two-step authentication and other security enhancements.

The good news is that many players within the space are trying to educate lenders and vendors alike about how to be ready for TRID. For example, Vantage Productions, a leading innovator in customer relationship management (CRM), marketing, sales and content solutions, hosted a free one-hour webinar earlier this year aimed at preparing senior managers and lending executives for the TILA/RESPA Integrated Disclosures (TRID) industry-wide implementation. Attendees received a detailed implementation worksheet and other useful tools to help them prepare.

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“The vendors are ready but I think the full readiness of lenders is up for grabs,” noted Sue Woodard, President and CEO at Vantage Productions. “Lenders will find themselves in a lot of trouble if they feel like this onslaught of new regulation is a passing fad and don’t dedicate the resources necessary.

“Second, leadership can be deficient, especially when interacting with sales staff. It reminds me of a parent that hates to hear their kid cry so they won’t take them to the doctor to get needed vaccinations. There are too few lenders focusing on boldly leading all their people, instead they are working around the concerns of their people.”

Certainly it seems like most lenders are looking for a band-aide approach to TRID compliance instead of taking a deeper dive and actually looking to improve their overall process. Those lenders that think holistically will be the winners after the dust has settled on TRID. For example, Security National Mortgage Company (SNMC) of Salt Lake City, Utah turned to Vantage Productions to centralize marketing, compliance and sales process management for its national network of retail origination branches.

Like many mortgage lenders, SNMC was concerned about standardizing and controlling messaging for Realtors and consumers to ensure compliance with CFPB requirements, as well as making sure that loan officers were utilizing the best possible materials across the country. SNMC was founded in 1993 as a subsidiary of the Security National Financial Corporation, which began in 1965 as Security National Life Insurance Company and has invested in mortgage loans for almost 50 years.

“As a company that started from humble beginnings, we have grown and succeeded over the decades by providing very personal service to our customers,” says SNMC Chief Marketing Officer Michael Shehan. “It was absolutely essential that we continued to offer the best possible borrower experiences while making certain that SNMC was fully compliant with the new regulations surrounding customer communications. With 80 branches across the country, we turned to Vantage Production to centralize this effort with VIP’s content and workflow, vastly improving control and messaging across our network,” he says. “Additionally, we offer a broad range of home loans due to our very well established relationships with mortgage investors, so not all of our loan programs are the standard products offered everywhere. We needed flexibility with differentiated program specifics for our sales force, and VIP creates outstanding presentations on every possible loan product,” he notes.

While a lot of focus is put on the lender and their technology partners, the real point of TRID was to improve the consumer experience. “The other thing to consider is the consumer,” reminds Stan Baldwin, Chief Operating Officer, Informative RESEARCH. Founded in 1946 and based in Garden Grove, California, Informative RESEARCH has grown from a local credit reporting agency to a national data and technology company providing a broad range of risk management products to the financial industry. Informative RESEARCH is a privately held company, known for its innovative approach to industry solutions via analytic data applications. The company is a Tier One credit reporting agency, providing proprietary tri-merge credit reports along with a broad variety of other risk management solutions for lenders and servicers, including pre-qualification, fraud detection, and credit score management tools. Informative RESEARCH is a preferred provider to the Lenders One Mortgage Cooperative.

In advising smaller lenders on the best way to prepare, Baldwin says, “they might want to pull together their resources with other lenders and join a consortium like Lenders One. In general, lenders need to rethink their process. We need more innovation to help lenders improve and gain efficiencies.”

In the end, compliance can actually be a plus for a lender. “Compliance should be a competitive advantage,” pointed out John Lawson, Chief Compliance Officer at Commerce Home Mortgage. He has more than 30 years of experience in the areas of consumer compliance, audit, accounting, finance, operations, and information technology in the specialized financial services and banking industry. Lawson’s previous work experience includes the Federal Reserve Bank of San Francisco, Bank of America, E-Loan and Union Bank.

“Getting back to fundamentals is key. If you are not documenting your controls, you are in trouble,” added Lawson. “Compliance is so abstract. Each regulation compliments another one, but if you don’t see that you will run into problems. You need training and legal support. You can’t interpret everything every time you come across something. Lenders may hire a guy that’s good at one thing, but not so good at other things. You need a suite of people that are good at a lot of things. If you under fund your compliance folks and your training, you are going to be in big trouble.”

About The Author

[author_bio]

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.

Don’t Reject Progress

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TME-TGarritanoI’m a history buff and a political junkie. There have been times in our country’s history where revolutionary change and advancement has occurred. When I think of huge change, I often think of the Industrial Revolution. The Industrial Revolution was a period in history when mankind found innovative and efficient ways of producing goods, manufacturing services and creating new methods of transportation. That sounds great, right? Well, it wasn’t embraced by everyone.

The industrial revolution was not without opposition. The most violent opposition was lead by a group called the Luddites. General Ned Ludd and the Army of Redressers began to send threatening letters in early 1811 to manufacturers in Nottingham. Workers were extremely angry that factory owners had lowered wages and were replacing skilled workers with unskilled workers (cheaper labor). They began to break into factories and destroy machines. Typically the destruction was aimed directly at mills and factories, but on a few rare occasions extended to people. The government responded quickly and forcefully. A large reward was placed in exchange for information regarding the identity of the luddites. In 1812 they passed a law making the destruction of machinery a capital offense. After troops were sent to the area, about 20 people were executed and many more deported from the country.

The second major event related to the opposition is known as the Peterloo Massacre. As workers became interested in politics for the first time, they began to make requests that included less government corruption, better wages and working conditions, and universal suffrage. Henry Orator Hunt and Richard Carlile arranged a meeting to occur in Manchester. The meeting drew a crowd of over 50, 000 people which caused the magistrate to panic and they called in the military. They responded by charging the crowd and killing several and wounding several hundred more. The government backed the military even though it was reported that most of the soldiers were drunk and out of line.

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So, change isn’t easy, but nonetheless it is necessary. The Industrial Revolution marks a major turning point in history; almost every aspect of daily life was influenced in some way. In particular, average income and population began to exhibit unprecedented sustained growth. Some economists say that the major impact of the Industrial Revolution was that the standard of living for the general population began to increase consistently for the first time in history, although others have said that it did not begin to meaningfully improve until the late 19th and 20th centuries.

The Industrial Revolution began in Great Britain, and spread to Western Europe and the United States within a few decades. The precise start and end of the Industrial Revolution is still debated among historians, as is the pace of economic and social changes. GDP per capita was broadly stable before the Industrial Revolution and the emergence of the modern capitalist economy, while the Industrial Revolution began an era of per-capita economic growth in capitalist economies. Economic historians are in agreement that the onset of the Industrial Revolution is the most important event in the history of humanity since the domestication of animals, plants and fire.

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The First Industrial Revolution evolved into the Second Industrial Revolution in the transition years between 1840 and 1870, when technological and economic progress continued with the increasing adoption of steam transport (steam-powered railways, boats and ships), the large-scale manufacture of machine tools and the increasing use of machinery in steam powered factories.

So, yes, there was opposition, but the benefits of the Industrial Revolution far outweigh the cons. My point is that you can’t fight progress and hope to be on the winning side. You will be a big loser. Who would have thought that a wristwatch could ever monitor your pulse, but now it can. Technology moves on. Back in 1600 the Qing Dynasty introduced a fully functional abacus on a ring, which could be used while it was being worn. Today we’re talking about the new Apple Watch. Apple calls this the company’s “most personal device yet.” The company goes on to state that, “our goal has always been to make powerful technology more accessible. More relevant. And ultimately more personal. Apple Watch represents a new chapter in the relationship people have with technology. It’s the most personal product we’ve ever made, because it’s the first one designed to be worn.”

Why is the Apple Watch so sought after? Apple says, “Each interaction is quick and light. Right from the watch face, the Glances feature gives you real-time views of the information you check most often, like the weather, stock quotes, upcoming calendar events, and more. Apple Watch notifications take on a whole new feel because they discreetly come right to your wrist. And they’re designed to let you address or dismiss them just as subtly.”

In addition, the watch does things that the usual watch doesn’t. According to Apple, Apple Watch gives you a more complete picture of your all-day physical activity because it measures more than just the quantity of your movement, such as the number of steps you take. It measures the quality and frequency as well. The three rings of the Activity app show your progress at a glance and provide the motivation you need to sit less, move more, and get some exercise. There’s also a separate Workout app for dedicated cardio sessions. Over time, Apple Watch can use what it learns about the way you move to suggest personalized daily fitness goals and encourage you to achieve them. So you can live a better day and a healthier life.

My guess is that Apple Watch will be a big hit. Why? Because more and more people are open to change. As I think about things like the Industrial Revolution and the Apple Watch, I see an ever-changing world. So, I ask myself: Why hasn’t that change hit the mortgage industry? The hard truth is that the mortgage industry hasn’t changed because our industry is resistant to change. It’s a shame that it has taken the mortgage meltdown and the government takeover of our industry to make change happen. Regardless, change is finally touching the mortgage space.

There’s a lot of complaints about the new integrated disclosures set to hit our industry in August. The more people complain, the more I shake my head. Why complain? It can’t be avoided. As the old saying goes: If you can’t beat them, join them. It’s time for our industry to stop resisting progress. Lenders shouldn’t be waiting around to be told how to advance, they should be advancing every day. Hopefully some day this mindset will change.

About The Author

[author_bio]

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.

Home Prices Are On The Rise

CoreLogic released its February 2015 CoreLogic Home Price Index (HPI) which shows that home prices nationwide, including distressed sales, increased by 5.6 percent in February 2015 compared to February 2014. This change represents three years of consecutive year-over-year increases in home prices nationally. On a month-over-month basis, home prices nationwide, including distressed sales, increased by 1.1 percent in February 2015 compared to one month prior.

Including distressed sales, 26 states and the District of Columbia were at or within 10 percent of their peak prices. Six states, including Colorado (+9.8 percent), New York (+8.2 percent), North Dakota (+7.7 percent), Texas (+8.5 percent), Wyoming (+8.4 percent) and Oklahoma (+5.2 percent), reached new home price highs since January 1976 when the CoreLogic HPI started.

Excluding distressed sales, home prices increased by 5.8 percent in February 2015 compared to February 2014 and increased by 1.5 percent month over month compared to January 2015. Also excluding distressed sales, all states and the District of Columbia showed year-over-year home price appreciation in February. Distressed sales include short sales and real estate owned (REO) transactions.

The CoreLogic HPI Forecast indicates that home prices, including distressed sales, are projected to increase by 0.6 percent month over month from February 2015 to March 2015 and on a year-over-year basis by 5.1 percent from February 2015 to February 2016. Excluding distressed sales, home prices are expected to increase by 0.5 percent month over month from February 2015 to March 2015 and by 4.8 percent** year over year from February 2015 to February 2016. The CoreLogic HPI Forecast is a projection of home prices using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

“Since the second half of 2014, the dwindling supply of affordable inventory has led to stabilization in home price growth with a particular uptick in low-end home price growth over the last few months,” said Dr. Frank Nothaft, chief economist for CoreLogic. “From February 2014 to February 2015, low-end home prices increased by 9.3 percent compared to 4.8 percent for high-end home prices, a gap that is three times the average historical difference.”

“This is the hottest home price appreciation prior to the spring selling season in nine years,” said Anand Nallathambi, president and CEO of CoreLogic. “Assuming a benign interest rate environment and continued strong consumer confidence, we expect home prices to rise by an additional five percent over the next twelve months.”

About The Author

[author_bio]

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.

A Wakeup Call

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TME-TGarritanoThe mortgage process is still a mystery to many. ClosingCorp, a provider of residential real estate closing cost data and technology for the mortgage and real estate services industries, released the results of a nationwide survey which reveals that approximately two-thirds of Millennials, adults between the ages of 18-34, who plan to buy a home are unaware of closing costs. The survey also found that across all adult age brackets, more than one-third of potential homeowners are “Not Very” or “Not At All” aware of closing costs.

“Much has been written about Millennials because they are the largest generation so far in U.S. history, and their longstanding impact on the real estate market and economy is going to be huge,” said Brian Benson, CEO of ClosingCorp. “Their buying behaviors are much different than previous generations, and of particular concern to the industry is that they are waiting longer to buy their first homes.

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This study emphasizes the need to better educate Millennials, and really all consumers in general, on the real estate closing process. While interest rates are often the driving force in initiating a real estate transaction, the realtor, lender, title and other settlement fees also have a significant impact on the down payment and cash outflow from the borrower perspective. Not understanding how everything is related can be a real impediment for first-time homebuyers who want to get into the market.”

The “ClosingCorp National Closing Costs Survey” of more than 1,000 adults, also showed that most people learn about closing costs from realtors, or by doing their own research. In fact, Millennial homeowners are more likely to learn about closing costs from a realtor as opposed to a lender by a ratio of nearly two-to-one.

“This study is very interesting in that it shows Millennials are more dependent on realtors than previously presumed,” said Benson. “We know they are more tech-savvy than their predecessors, so we believe this really highlights the complexity of a residential real estate transaction. Whether they are researching a home on their own or getting help from an interested third party, the bottom line is that people need access to the correct information, and it needs to be simple for them to understand. With the upcoming changes to the disclosure process being made by the Consumer Financial Protection Bureau this August, we as an industry should be stepping up our proactive education efforts to ensure homebuyers are fully prepared to make the most significant financial transaction of their lives.”

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Closing costs are paid when a real estate transaction closes and the title to the property is transferred to the buyer. They typically equal 2 to 5 percent of the total purchase price of a home. The fees are incurred by either the buyer or the seller, and typically cover everything from appraisal, inspection and attorney’s fees to home warranties.

I find all of this very troubling. Borrowers shouldn’t be in the dark about closing costs or other parts of the mortgage process. The best way to improve this is to automate the origination process with technologies like e-signatures. For example, Capsilon has launched a new version of its flagship product, Capsilon DocVelocity, that includes support for the electronic delivery, signing and vaulting of borrower disclosures and other mortgage-related documents.

This new version of DocVelocity gives users the ability to automatically assemble disclosure packages and email them to borrowers to sign electronically. Borrowers access the new DocVelocity Signing Table, an intuitive user interface for electronic signing of mortgage-related documents, to provide consent to receive electronic disclosures and to review and e-sign the documents.  Compliant with the Uniform Electronic Transaction Act (UETA) and the Electronic Signatures in Global and National Commerce Act (E-Sign Act), the new DocVelocity electronic transaction capabilities further Capsilon’s vision of straight-through processing (STP) of mortgage loans by reducing the labor associated with printing, assembling, packaging and shipping documents that need to be signed by borrowers.

The DocVelocity E-Vault, a secure location where legally binding, authoritative copies of electronically signed documents and their related transaction documents are stored and managed, is also new in this latest release of DocVelocity. Fully integrated with DocVelocity, the DocVelocity E-Vault protects assets using robust encryption, time-stamps documents and wraps them with a tamper-evident sea, maintains an audit trail for every stored asset and controls access to these documents with customer-defined user privileges.

These new E-Signing and E-Vaulting capabilities also help lenders demonstrate compliance by providing tracking and evidence of electronic delivery, proof that disclosures were delivered within the required timeframes and support for the authenticity and non-repudiation of electronic signatures.

In addition to the new electronic transaction capabilities, this new version of DocVelocity includes significant enhancements to the document management and document workflow capabilities of DocVelocity. These document management enhancements include a myriad of new capabilities to speed the workflow required for Capsilon’s vision of straight-through processing of mortgage loans. These enhancements include:

>> The ability to assign tags to documents to enable richer contextual information about documents. Document tags provide structured data that can be leveraged for automation.

>> A new document review workflow that gives users the ability to review and mark documents as “Accepted.” Once accepted, the document is locked and further changes to the name or contents are prevented.  This ensures the integrity of documents throughout the workflow.

>> The ability to mark a document as a “Decision Document.” This identifies which documents were used for making underwriting decisions, speeds workflow and ensures loan integrity.

>> Document-level security that enables role-based access control to documents. The ability to view, sort and deliver specified document types, along with a number of other actions, is granted only to users assigned to specific roles.

“The pressure on mortgage lenders to reduce loan production costs while maintaining loan quality and compliance has never been greater,” said Sanjeev Malaney, chief executive officer of Capsilon Corporation. “Our goal is to deliver the technology that lenders need to realize an exception-based model of straight-through processing of mortgage loans, where up to 80 percent of labor is eliminated. This new version of DocVelocity delivers on that promise with support for electronic transactions and improved document management and document workflow capabilities that speed loan turn times and reduce labor-related loan costs, while ensuring compliance.”

This new version of Capsilon DocVelocity is expected to be available to customers in the second quarter of 2015. Current DocVelocity customers can access the new product features as part of their SaaS subscriptions, though some new features and services are available at an additional cost.

The bottom line is that we all have to do our part to make the mortgage process better.

About The Author

[author_bio]

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.