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Mortgage Software Solutions Blog

Cloud Storage Reduces IT Costs and Improves Scalability for Mortgage Companies


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Those of you who've worked in the mortgage industry for the last two decades know how much has changed in just the last five years. Technologies have evolved quickly to provide more ways to accomplish tasks, including superior organization. Despite this, you've perhaps balked on finding ways to reduce your IT costs. Doing things the same way is perhaps hard to break after being in business for over 20 years.

Don't become complacent, because many IT solutions are affordable and necessary.  Security should be paramount when storing client information.  Today's software is being written to comply with the latest regulatory requirements and not all of it is expensive either.

With a rise in cloud and mobile technologies, you can do so much more while paying less. The same goes with scalability.

Using Automation to Improve Client Communication

When you look at the biggest challenges facing mortgage organizations like yours, client communication is at the top of the list. In a time when you likely have to compete with other lending agencies a short distance away, you need to keep your clients loyal.

The way forward is to use automation to gain efficiency. The older methods of reaching your clients only by phone can frequently lead to delays. Consider other communication methods, texting for example may be the best way to shorten the business cycle.    

Automating your communication will allow you to reach your clients faster and provide the ability to personalize content for more sucessful lead generation. Through affordable mobile technology and automation, you can send information at key times to your existing or prospective clients. Doing so educates them on their mortgage options.

Using the Cloud for Data Storage and Retrieval

We noted a while ago that cloud security is the future of all mortgage companies. After saying this over two years ago, it's a fact now, and a must to prepare for the unexpected.

Considering on-site servers can easily become hacked, you need to upgrade to the cloud to keep yourself compliant with client data. While cloud pricing varies depending on needs, it still reduces cost because you're eliminating maintenance on your own servers.

During disasters, you're also preparing yourself for business continuity. You can access anything in the cloud 24/7 as long as you have an Internet connection. When a disaster strikes, you can retrieve all client information immediately to keep your lending business on its feet.

The Use of Mobile Apps to Simplify the Lending Process

Many home buyers want to simplify how they obtain a mortgage without all the protracted steps. Creating a mobile app to make the process easier helps remove complex steps otherwise increasing your operating costs.

An app gives your clients more control over the time it takes to get a loan and the terms they want. Despite apps requiring design time, they'll pay off long-term thanks by increasing business and gaining your customers' trust.

Transparency is an important aspect to lending today. Allowing this through mobile technology is essential, as long as you have quality IT management in place.

Scaling Your Mortgage Company

To keep up with demands, you can do a lot of practical things to scale your mortgage business. If you're short on clients, Zillow reminds using CRM software can often help connect better with potential customers. Also redesigning your website and starting a blog can get home buyers more interested.

During times when you just need to find room to expand data, the cloud can scale quickly for you. This eliminates having to depend on other risky storage methods. When you want to scale due to unexpected growth, you can do so with the cloud, plus still have room for further growth down the road.

At Access Business Technologies, we provide game-changing technologies and tools to help your mortgage business reduce costs while still growing. Our MortgageWorkspace product allows you to scale quickly and securely by putting your business into the cloud. It offers efficient ways to keep your data compliant using intuitive dashboards and admin tools. Learn more about how MortageWorkspace can make the mortgage process easier for your employees and customers by scheduling a call with us. 

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Topics: Compliance Cloud Mortgage Servicing Cloud Computing MortgageWorkSpace cloud storage

The Inevitable Mortgage Audit: Are You Prepared?

The Inevitable Mortgage Audit: Are You Prepared?

Anyone who has worked in the mortgage arena for any length of time knows that mortgage audits are inevitable. But even if you know that audits are a reality of the job, are you actually prepared?

Luckily, we're here to give you an idea about that—five ideas, in fact.

The Federal Financial Institutions Examination Council (FFIEC)

Working in the mortgage field, you are no doubt familiar with this group. The FFIEC has the power to develop and prescribe uniform principles and standards for examinations of financial institutions. The Council provides training for examiners at both the federal and state levels. It also provides guidance on compliance audits to the financial services industry through its member agencies.

Don't Reinvent the Wheel. Utilize Risk Assessment Models.

Several of the regulatory agencies with jurisdiction over financial institutions provide assessment models that can help with risk management. In addition, some industry organizations and commercial companies offer similar models. Just to name a few:

  • Consumer Financial Protection Bureau (CFPB) in its Supervision and Examination manual
  • Federal Reserve (the Fed) in its Community Bank Risk-Focused Consumer Compliance Supervision Program
  • Federal Deposit Insurance Corporation (FDIC), Comptroller of the Treasury (OCC) and National Credit Union Association

These organizations all publish guidance on risk assessment programs that will help you demonstrate your institution's risk as it is, not as the board wishes it would be.

In addition, ComplianceAlliance.com offers a Mortgage Compliance Checklist Tool to help mortgage companies comply with the various lending regulation requirements.

Compliance Risk Assessment

Compliance examinations, these days, rely less on identifying non-compliant transactions and more on assessing risk and evaluating the financial institution's components that manage, mitigate, or prevent risk. Your financial institution's risk assessment should focus on its structure, policies, and procedures; how actively your board participates in oversight; and of course, your products and services.

Here are three basic questions your compliance risk assessment should answer:

  • First, identify your worst case scenario—not just now but in the future.
  • What controls does your institution have in place?
  • How well do your controls limit the impact of non-compliance?
  • How big is the gap between the worse case scenario and the controls you have in place? That gap is the risk that you want to reduce to as small a point as possible.

What Characteristics to Assess

The following are the characteristics that you want to identify with respect to:

  • Each of Your Institution's Products: Identify the volume and activity—whether it's a new product or an old one. Determine how complicated the product is and whether you intend to make changes or have recently made changes to the product.

  • Your Institution's Internal Operations: Identify how large your staff is, your turnover rates, whether the organization operates with centralized management or not, whether the staff and the organization's culture are compliance driven, and whether the organization has a robust internal monitoring system. Also review recent compliance risk assessment efforts.

  • Third-Party Service Providers: Identify compliance monitoring and due diligence efforts.

  • Each of Your Services: Identify any unfair, deceptive, abusive acts or practices as required by regulatory agencies.

  • Your Consumer Complaint Process: Identify response time and efficacy, and review the record-keeping policy with respect to complaints.

The Federal Compliance Laws for Financial Institutions

The American Bar Association provides its members with a list of the Federal laws that require financial institutions to comply with their rules and regulations and that cover mortgage audits. Just to remind you how regulated the mortgage industry truly is, here is a sampling:

  • Truth in Lending (Regulation Z) disclosure statements
  • Equal Credit Opportunity Act (Regulation B)
  • Fair Credit Reporting Act
  • Federal Reserve Board Regulation, Fair Credit Practices Rule
  • Fair Debt Collection Practices Act
  • ServiceMembers Civil Relief Act

To read an analysis of the accuracy of the CFPB's mortgage compliant data, see National Mortgage Professional Magazine's article from February 2017, entitled "Analysis: How Accurate is CFPB Mortgage Complaint Data?"

To learn more about compliance for mortgage companies, please contact us. We are your resource for all your mortgage company audit compliance questions.

Topics: Compliance Consumer Finance Protection Bureau Compliance for Mortgage Companies Compliance Audit

3 Tools to Avoid Compliance Risks with Data and Electronic Documents

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Picture this. Your company has decided to provide end-to-end mortgage services for a new client. To make document sharing easier, you activate a remote login account so that they can have access to consumer reports. Hackers gain access on the client's end, steal the remote login credentials, and grab sensitive information. Unfortunately, this is not a hypothetical situation.

This happened to a mortgage lender back in 2008. 2008? That was 9 years ago, yet the FTC still uses this case as one of their prime examples of a security lesson taught the hard way. This company didn't protect vital data, and the FTC is strictly auditing them until the year 2028!

This is what can happen when your mortgage company creates compliance risks with data and electronic documents. It's a lot cheaper, we'd say, to invest in better data security than to lose the goodwill of your customers and have to defend yourself legally and face other consequences connected with a data breach.

Here's what you need for maximum security and full compliance.

Office 365 Mortgage™

With Office 365 Mortgage™, you are using all of the productivity features that Office 365 offers. Plus, it's configured to work right alongside your mortgage software for maximum security. How does it keep data safe?

  • One Password, One Portal - Users have secure, single-sign-on access, which helps combat issues that revolve around password reuse and other weaknesses. When you hire someone, there is only one account and password to set up, and when someone leaves, you only have one account and one password to delete.

  • Rest Easy With Built-In Security - Microsoft gives you three layers of security and also guards your business email with industry-leading anti-spam and anti-malware defense.

  • Prevent Data Theft - Security is a priority at Microsoft data centers, but simply deploying Office 365 straight out of the box cannot single-handedly keep your data safe. Mortgage businesses need additional layers of protection. This is why we step in and use complex configurations and custom-written software to make Office 365 Mortgage™ exceed banking standards.

MortgageExchange®

Mortgage companies typically rely on human intervention to determine inconsistencies in their paperwork. Two or three different people will either enter the data into a system to cross-check against each other for inconsistencies; or, businesses will use OCR systems to automatically recognize text and numbers. Both of these methods require a certain amount of human intervention to audit inconsistencies, perform exception processing, and control data quality.

MortgageExchange® eliminates the need to re-key data between origination, servicing, core systems, and accounting. In this way, you seamlessly connect people, processes, partners, and information across dissimilar systems, while eradicating data re-entry, costly errors, and security issues at the same time.

Errors in documents can be as simple as a name misspelled or a wrong number in an address, or as serious as incorrect loan amounts or missing pages. All of these errors cause delays in closing, and incorrect loan amounts can have major consequences for the downstream systems processing the loan.

DocumentGuardian

DocumentGuardian is a comprehensive document management system designed specifically for the mortgage industry. It is a cloud-based email service that provides secured encryption and transfer of files, pictures, and documents.

It starts by providing the borrower with a secure and easy way to send their NPI (Non-Public Information) documents without registering or creating a password. Compliance auditors recommend this type of security because, unlike box-type file sharing apps, it stores your documents in our secure data center only; not on individual computers and mobile devices.

Unfortunately, mortgage companies and financial institutions are still extremely vulnerable. With threats growing bigger every day, it is now more critical than ever for businesses to develop an information security plan and make sure that their vendors and other third-parties are covered too.

The non-profit Online Trust Alliance (OTA) warns that the "cyber landscape has changed dramatically just over the past 12 months," with organizations both large and small being the victims of attacks. Housingwire Magazine reports that numerous mortgage companies are now increasing security because of these significant incidents:

  • Thieves walked away with $80 million in 2016 during a cyber attack at the Federal Reserve.
  • 2017 started out with London-based Lloyds Banking Group experiencing a two-day-long distributed denial of service (DDoS) attack.

Employee breaches are also happening. In 2016, a jury awarded Mount Olympus Mortgage Company (MOMC) more than $25 million for their claims against Guaranteed Rate, another mortgage lender. These claims alleged that Guaranteed Rate, along with former employees of MOMC, illegally transferred hundreds of loan files from MOMC's internal systems to Guaranteed Rate's.

In today’s digital world, it is more important than ever to protect vital information and documents from these cyber thieves—both internally and externally—and to stay compliant with industry regulations that are becoming more stringent in response. Please contact us today at Access Business Technologies to learn more.
Topics: Compliance data management for mortgage companies data security

8 Things You Need to Know about Mortgage Compliance

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Mortgage companies have a number of federal and state regulatory matters with which to comply. At times, it may seem difficult to keep it all under control. But when it comes to mortgage compliance, what you need to know is that you don't have to go it alone. We put together a list of eight tips to help you.

TRID Disclosure Audits

TRID (TILA-RESPA Integrated Disclosure) is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. TRID requires mortgage companies to combine the Truth in Lending Act information they provide consumers when they apply for and close on a mortgage with the Real Estate Settlement Procedures Act (RESPA) information lenders now must provide borrowers at settlement.

These disclosure rules are a big challenge to the mortgage industry and they apply to most closed-end mortgages. The Consumer Financial Protection Bureau promised another rule on this issue in April 2017 that will clarify some of the points commenters raised during the open comment period.

Home Ownership Protection Equity Act (HOPEA) & State High-Cost

In 2013, Congress passed the HOPEA, which requires mortgagees to provide additional information to consumers who buy high-cost homes. The types of mortgages covered by HOPEA include purchase-money, refinance, closed-end home equity loans, and open-end credit plans. States also have rules that apply to the lending involved with high-cost homes.

State Consumer Credit & Fee Restrictions

States and municipalities often pass consumer credit laws against predatory lending. They often contain fee restrictions. They also control licensing laws and regulations with respect to lending. With so many state laws, financial institutions that operate in multiple jurisdictions sometimes find it difficult to comply with all the different rules.

RESPA GFE and HUD-1 Disclosures

RESPA revised the Good Faith Estimate (GFE) rules that mortgage companies must provide borrowers at settlement. Mortgage companies must provide a good faith estimate of the total closing costs in a real estate transaction within 3 days of receiving the loan application. Such costs include legal fees, title searches, title insurance, recording fees, notary services, pest and house inspections, document preparation, taxes, and fees for surveys.

RESPA also forbids lenders to take kick-backs on the loans or require borrowers to use a specific title company.

HUD-1 Disclosures, on the other hand, contain the actual closing costs (compared to the Good Faith Estimates), and the lender must allow the borrower to review the HUD-1 form for 24 hours before settlement.

HMDA Filings and Data Analysis

The Home Mortgage Disclosure Act (HMDA) requires mortgage companies to report to their regulators data that shows whether or not they provide credit in the geographic area where they locate their offices. The data also lets government officials target investment dollars to areas that need growth investments.

Flood Zone Determination

The Flood Insurance Reform Act of 1994 provides disincentives for property owners to live in flood-prone areas. The Act ties flood insurance premiums to the flood risk, so flood-prone areas mean higher premiums for those property owners. The law requires lenders to use flood insurance maps to identify whether the property the borrowers want to buy lies in a floodplain. If the property is in an area prone to flooding, the borrowers must buy flood insurance (which may include higher premiums) to protect their investment interest.

Due Diligence and Audits

Compliance for mortgage companies encompasses more than following the "letter of the law." The way forward for mortgage companies is to follow the same level of compliance required for banks. That means conducting due diligence, assessing risk for fraud and identity theft, assigning compliance officers, and training employees in compliance matters. It means complying with Anti-Money Laundering laws and Suspicious Activity Reports.

Mortgage companies today need to take advantage of cloud services in order to stay on top of the ever-increasing regulatory requirements. To talk more about compliance challenges and how ABT’s suite of cloud IT services can help, please contact us.

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Topics: Compliance mortgage business