By Cathy Blaszyk
Vice president of lender services
Closing Corp
Changing Regulations,
Changing Technology
impose, their current methods simply do
not work. as the cost of business rises
and revenue per loan falls, bankers
must commit to modifying their strategies and operations significantly.
Be prepared to handle more reforms in 2012
Now that 2011 has drawn to a close, the mortgage industry must reflect on its challenges,
evaluate its progress and assess the
work that lies ahead. Making predictions for 2012 requires a close examination of the housing market’s continued
struggles, as well as likely trends that
will contribute to change.
as mortgage bankers and branch operators examine what transpired in the
past year and modify their systems accordingly, they must also brace for inevitable regulatory changes. This evolving
and unpredictable regulatory environment is understandably the industry’s
largest concern. Mortgage companies
may find themselves unable to keep
up with changes, which can lead to immense tolerance violations. Technology
likely will become a common thread affecting how businesses operate and
more organizations will invest in the
up-to-date technology they need to remain viable.
The real cost of regulations
new regulations requiring standardized good faith estimates (GFE) and the
modified HUD-1 form were designed to
protect borrowers. The cost increases
they created for mortgage companies
unavoidably trickle down to consumers, however.
according to a study of 2010 closing
costs by Bankrate, the heightened transparency required by the 2010 real Estate
Settlement Procedures act (rESPa) rules
increased costs for consumers 36. 6 percent on a $200,000 mortgage. Bankrate
attributes the rise in cost to tighter underwriting standards, which require
additional time on each application.
Companies often lack the manpower to
verify forms thoroughly; therefore, when
discrepancies relating to a HUD-1 arise,
they often are unable to revisit the initial
document and must accept the subsequent tolerance violation.
The industry can no longer ignore the
amount of tolerance violations being
accrued. new systems to manage the
accurate disclosure of GFEs while remaining within tolerance limits must be
implemented. This means finding a system that delivers an immediate return.
One consideration should be online solutions that do not involve a large capital investment or a complete technology
overhaul. These platforms can quickly
deliver the data needed to avoid tolerance violations.
A year of change
Looming over the industry is the 2012
presidential election and the changes
that the administration of either party
would push if elected. reports of a possible combined GFE-Truth in Lending
( TIL) form and the subsequent software
changes that would entail are creating
considerable unrest and challenging the
loan origination software (LOS) providers who support the industry.
as the industry anticipates further
changes, companies must focus on today’s most pressing concerns. They
should now understand that regardless of future rules the government may
Key partnerships
Developing strong, strategic partnerships in 2012 will have a positive effect
on the industry.
Short on development resources,
more bankers should resolve issues and
gain a competitive edge by working with
vendors that offer expertise in specific
areas. Loan quality has become the industry’s primary focus. The need to get
rESPa-compliant GFE data in real time
is a driving force for seeking support.
Instead of manually gathering GFE information to deliver to consumers or relying
continued on page 42 »
Cathy Blaszyk is vice president of lender
services for ClosingCorp, a real estate information and data-services company based
in La jolla, Calif. ClosingCorp develops Web
products to serve the needs of real estate
professionals and consumers, including
the SmartClosing Mortgage Calculator, the
SmartGFE Service for loan originators and
Closing.com. Blaszyk has spent two decades
in the mortgage-banking and brokerage
industry. reach her at cblaszyk@closing.com
or (858) 551-1500, ext. 206.
By Wil Armstrong
CEO
Blueberry Systems
Embrace Seamless Loan Production
Know why new technology improves workflow and customer service
Mortgage originators today need loan-production tech- nology and processes that address the demands of their customers
and fulfill emerging regulatory requirements. To do this, companies must
have tools to integrate their disparate
internal systems and ensure full compliance with new industry regulations,
while minimizing downtime and maximizing efficiencies.
With the right technology, seamless
loan production can improve originators’ workflow, as well as improve their
clients’ experience with the mortgage
process. There are three primary reasons
for originators to make integrating this
technology a priority for their business.
1. Lower cost per loan
Originators must think through how in-
ternal systems and workflow impact
their part of the overall loan process.
Workflow often is treated as a dirty word
in the industry, but it simply refers to the
systems, processes and procedures that
ensure excellent customer service, as
well as what should be in place to con-
sistently maximize the economic oppor-
tunity presented by each new loan.
Wil Armstrong is co-founder and CEO of
Greenwood Village, Colo.-based Blueberry Systems LLC, a provider of advanced
technology solutions to the mortgage and
financial-services industries. armstrong
previously served as director for the Colorado Mortgage Lenders association. He
remains active as chairman of Cherry Creek
Mortgage Co. and as first vice chairman on
the board of directors of Colorado Community Bank. armstrong also serves as the
vice chairman of Washington Investment Co.
reach him at wla@blueberrysystems.com.
