Sussing up SaaS
Software-as-a-service technology could help lenders and originators share compliance risks
By Lionel Urban, president and CEO, PCLender.com
Significant changes in government oversight of mortgage
lending have brought compliance
to the forefront of broker-banker relationships. Brokers and bankers must work
together to avoid penalties that result
from noncompliance.
This has become a more complex
and risk-laden proposition in the past
12 months as compliance regulations now
closely scrutinize origination processes.
Broker-facing origination tools that
lenders provide, including software-as-a-service (SaaS) technology, can help track
those processes and may become critical
watchdogs for all concerned.
The evolution of broker portals
From 2000 to 2006, an unprecedented
proliferation of mortgage products reflected an unprecedented proliferation of
private investors. Many wholesale lenders,
having adopted automated loan-origina-tion-system tools, began to ask vendors to
create broker portals to allow closer management of their originators.
Some lenders even developed their own
broker portals to mixed reviews. Lesson
learned: Originations are only as good as
the systems and procedures through which
they are made.
New lending-compliance regulations
focusing mortgage bankers’ attention on
the earliest stages of origination emerged
when the Federal Reserve Board approved
revisions to the Truth in Lending Act and
the Home Ownership and Equity Protection Act this past July. Both are aimed at
protecting consumers from unfair lending
and servicing practices. Revised Real Estate Settlement Procedures Act requirements also are waiting in the wings.
These have created a heightened need to
track applications, initial disclosures and
state broker licenses, placing a burden on
bankers to monitor specific information
about each origination, even those denied.
Recent regulatory changes not only explicitly reset the nexus of compliance enforcement with the Federal Reserve Board,
but they also eliminate the need to prove
a “pattern” of noncompliance before enforcement. Therefore, a single instance of
noncompliance is enforceable and creates
significant risk for lenders and brokers.
Mortgage professionals must manage
practices closely to comply. To protect
their role as a channel of qualified borrowers to wholesale banks, brokers must
submit high-quality loan files in compliance with government mandates.
Further, banks will be required to demonstrate compliance safeguards. Brokers
should expect lenders to leverage loan-origination technology to monitor third-party
originations. Ideally, solutions should help
brokers meet compliance benchmarks and
create reports that will satisfy regulators.
Wholesale FHA &VA Loans Across The Nation
Non-Supervised Direct Endorsed Lender
VA Automatic/LAPP Lender
Jumbo FHA and manufactured homes
Always 24-48 hours underwriting
Lowest rates
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Manual Experienced Underwriting
Average underwriter experience in
government loans is 17 years
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Call now! Our experienced Government in-house
AEs are ready to serve you!
Now accepting new wholesale applications
from FHA Loan Correspondents.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Steve Vargem, SVP Sales
888-508-7878 or 949-450-1800 ext. 1284
svargem@trustone.com
www.trustone.com
Practical SaaS
An outsourced option, the SaaS model,
could be a practical business-process-au-tomation solution. For lenders and originators, SaaS is compelling because it shifts
management of market-driven details to a
more reliable and cost-effective model.
There can be hundreds of tables and
forms related to loan programs, state disclosures, licensing, data checks and loan
limits to ensure accurate data entry. Failing to work from updated information is a
looming compliance risk.
Further, SaaS lending platforms with
broker-facing portals can minimize risk for
wholesale lenders and originators by minimizing the chances of processing noncompliant loans. For many, that is a fundamental
business practice to ensure they meet the
challenges of today’s market.
Lionel Urban, president
and CEO of PCLender.
com, is a 20-year mortgage industry and technology veteran. He has
been responsible for loan
production, operations,
secondary marketing and supervised lending-department compliance. PCLender.com is
an enterprise-class mortgage-technology
company that supports more than 50 banks,
credit unions and mortgage companies. Reach
him at Lurban@pclender.com.
AK, AZ, CA, CO, CT, FL, GA, HI, ID, IN, MD, MI, MO, NM, NV, OK, OR, UT, VA, WA, WY
