Scotsman Guide - June 2011 Residential Edition

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By Rene F. Rodriguez
Ceo
Mortgagedashboard
End Your Compliance Nightmares
Real-time data alerts can automatically stop problem loans in their tracks

Today’s mortgage brokers and bankers face more compliance hurdles than ever before. And the government is just getting started.

The recent change to loan-originator compensation presents a perfect example of the type of dramatic alteration mortgage professionals have faced and will continue to face. And consider this: The lights haven’t even been turned on at the Consumer Financial Protection Bureau (CFPB) yet.

The CFPB, born from the Dodd-Frank Wall Street Reform and Consumer Protection Act, intends to protect consumers of financial products and services. That means more oversight, more rules and more regulations for those of us on the production and distribution side of those products and services — and it will translate into more compliance nightmares.

To succeed, mortgage origina-
tors will need to comply with CFPB
mandates, not to mention investor
guidelines. naturally, mortgage bank-
ers are approaching this problem from
numerous angles. Some are trying to
do a better job training originators to

“To succeed, mortgage
originators will need to
comply with [Consumer
Financial Protection Bureau]
mandates, not to mention
investor guidelines.”

be mindful of compliance violations. Others are staffing up their quality-control teams, hoping to evaluate loans more carefully before they fund. A few have put their heads in the sand, hoping this terrible nightmare will end.

Here’s the thing: none of these ap-proaches will work. Loan originators aren’t compliance personnel; examining loans after they’ve been processed is painfully inefficient; and ignoring a problem because you don’t know what to do next is never a solution.

So how can you improve your regulatory and investor compliance? For starters, you must have someone — or something — looking over your shoulder and the shoulders of your employees. By and large, this can best be accomplished with automation.

Mortgage-origination automation already has advanced to the point that business rule-sets and decision engines are widely available. These tools allow mortgage lenders to set up programs and monitor them in real-time from loan processing through closing. Most are simple enough to manage without technical assistance.

One thing missing in the past was
real-time alerts. Dealing with problems
long after mistakes take place isn’t a
viable method of preventing the same
mistakes from recurring. That’s not how
change-management works. To make
matters worse, as the rules continue to
change, it’s nearly impossible for pro-
fessional loan originators to keep up,
especially if they’re trying to manage
their existing and future customer rela-
tionships effectively.

Rene F. Rodriguez is CEO of MortgageDashboard, the leading Web-based, on-demand loan-origination software built on the Software as a Service (SaaS) model. Rodriguez is a renowned behavioral, leadership and organizational change expert; world-class sales trainer; and dynamic keynote speaker. Find out more at SeeReneSpeak.com.