Higher mortgage rates and stagnant housing inventory pools may be the reason for a drop in the number of mortgage loan applications. As the country continues to struggle up from the depths of the Great Recession, housing starts and real-estate transactions remain at the back of the pack in terms of recovery pace. Although things have improved (in April 2014, loan application submissions were 11 percent lower), mortgage companies must still keep their eyes on the razor slim margins they now maintain.
Maintaining or growing that margin can be achieved through a balance of reducing costs and increasing productivity. Technological advances offer programs and services that can streamline and speed up mortgaging processes, allowing more work to be accomplished without extending the work day. The problem is that mortgage bankers are not technology gurus. The speed of technological evolution makes it almost impossible for anyone except technology specialists to know what software products and services are both effective and safe.
The emergence of cloud computing may offer tantalizing options, but the development of regulations and standards around security issues are lagging. Fear of losing valuable information may be unnecessarily freezing mortgage companies out of the cloud market altogether.
The fears are understandable. In early 2014, the Cloud Security Alliance (CSA) issued a list of the nine most prevalent security threats in cloud computing. Of those, four are now well known because of recent hacks into retailers’ databanks. Data breaches (stealing data), data loss (server failure), account hacking or hijacking (stealing of identity and credentials), and malicious insiders (Edward Snowden) are legitimate concerns. Every industry contemplating cloud access needs to find cloud service providers that can adequately address those concerns.
Fortunately, just this spring, that same CSA issued a white paper on its “Best Practices for Mitigating Risks in Virtualized Environments” which provides guidance regarding managing security risks specific to cloud servers and services. At the same conference, CSA announced a new “Certified Cloud Security Professional” certification, which establishes an international standard for design, implementation, and management of cloud environments. The message to non-cloud participants: safety and security systems have been evolving along with the cloud itself. There are now cloud IT professionals and services that can provide excellent SaaS (Software as a Service) products and services that are secure, reliable, and ultimately, extremely cost effective.
Some cloud IT professionals have added yet another layer of cloud-based IT-security standards in response to heightened security requirements for banks. The federal government is working on standardizing protections against cyber crime in the banking industry. Because mortgage companies routinely deal with confidential client financial information, some mortgage-industry professionals have elected to bring their businesses into compliance with existing banking IT-security processes and regulations. The belief is that this will be required throughout the mortgage industry in the not-so-distant future.
So what can a mortgage broker expect to find when seeking cloud-based mortgage-support IT systems? Here are a few examples:
1. The opportunity to eliminate the rental cost of the brick-and-mortar office. Cloud-based mortgage programs can be accessed from anywhere, so bankers and their employees can work safely and securely from their homes.
2. A technology team committed to keeping cloud systems up and running, and that can coordinate cloud services with local IT support. This relieves the local technology staffer to focus on maintaining clear technological channels between clients and associates.
3. Flexibility to expand or adapt programs to accommodate shifting regulations and standards.
4. Flexibility to expand staff levels or offices across cities, counties, or even other countries, without the added expense of additional software or servers.
The evolution of cloud-computing security systems means it is now much safer and more economical to engage cloud technology and services for the management of highly confidential data. Mortgage bankers who want to improve their margins while reducing costs and keeping busy in today's challenging real-estate market can contact us at any time.