Regulation. The word seems in and of itself antithetical to the American spirit of free enterprise, entrepreneurship, and business progress. But any discussion of today’s mortgage industry must start with the changes wrought by the tide of regulation sweeping the marketplace. The White House, Department of Justice, the OCC and the Consumer Financial Protection Bureau (CFPB) are all striving to protect consumers and bring “transparency” to the mortgage process – from origination all the way to loss mit and foreclosure. So what exactly do all the regulations mean?
Well, first it means that government has formalized a trend toward holding the industry increasingly responsible for having the right work processes and mechanisms in place. Regulators and bank examiners actions will not focus solely on whether a regulation or law was violated, but also on whether or not companies did research and implemented solutions to make sure their processes were compliant.
Second, it means increased costs. Many of the regulations we must now embrace carry with them deadlines for compliance and financial exposure (fines) for failure to meet the timelines outlined within those regs for specific activities. Let’s face it, new systems and new ways of thinking are now unavoidable. Innovation cannot be left to chance. Mortgage companies must achieve exponential improvements in process efficiency and the intelligent management of costs enabled by the application of the right technologies to combat regulatory exposure and mitigate compliance risk.
Third, customer service has become an organizational imperative. Today’s mortgage companies must become experts at customer service through the application of portal technology, multichannel communications options, and the intelligent management of the full cycle of customer communications. Communications must now be in plain English, using simpler forms, with information that borrowers need highlighted and displayed prominently. Additionally, all communications need to be archived logically, and any document capture system must be integrated with the database of record to insure that images and data agree.
No other industry has a greater need for a powerful customer communications system than today’s mortgage industry. Regulatory requirements, and the exposure they represent, negate any thought of building a system based on off-the-shelf software tools in a timely manner. Speed to market is critical and there is no better way to stand up to the rigorous requirements of the marketplace than by deploying a tested technology, unencumbered by traditional processes, systems, and physical locations.
For more information, read our latest white paper on this subject.
Can you currently organize and present large amounts of complex data to your borrowers in an easy-to-understand manner? Is it possible you could be unknowingly exposed or you could unknowingly face exposure for regulatory non-compliance? We'd love to hear from you in the comments below.