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» VISIT US ONLINE @ DSNEWS.COM 61 perspective, and asset owners struggle to ask the right questions and apply the appropriate pressure," Ryan said. "Default servicing often operates on a postmortem model and tends to look at the problems that have already happened. At Aspen, we implement solutions that ingest and normalize real-time data from various departments, vendors, and service providers on the property timeline to help manage issues in real time. I'd like to see those concepts take root in the larger industry as a whole, as it will help to change the business, drive efficiency, provide for better outcomes for all stakeholders, and enable implementation of data models that could lead to the next level of business understanding through artificial intelligence and machine learning." Ryan told DS News that one way to move in the right direction is for the industry to adopt standards around data modelling. "If we can increase the standardization of forms and processes across the industry, then data will be more useful, integrations will become easier, and we can cut down expenses." "Communication is key to our efforts," said Freddie Mac's Gilmore. "Making sure that we all understand who the critical partners are along the entire chain—not just the servicers, but the vendors that they utilize and the different ways they obtain their data." As Gilmore explained, "More and more, the servicers, the GSEs, and their vendor partners are ultimately pulling data from the same sources. So, it's really about understanding how our partners are managing their business and plugging into that, versus building something brand new that they may not need." DIMONT'S Denis Bronsan also emphasized the critical nature of an ongoing dialogue between the various parts of the industry, whether directly on a day-to-day basis or via groups such as the National Mortgage Servicing Association or various industry events that bring different organizations together in one place. "e traditional 'vendor-vendee' mentality requires the vendee to say, 'I don't want to commit to certain contract terms or volume levels.' I get that, but that's illogical, and it's not how other industries work," Brosnan said. "Amazon and its vendors, they talk all the time about volumes and delivery and standards because they're dependent upon each other. It's time for our industry to recognize those interdependencies." LINKS IN THE CHAIN Blockchain and distributed-ledger technology are buzzwords that have been thrown around a lot in recent years with the rise of cryptocurrencies such as Bitcoin that make use of it. Distrib- uted ledger technology employs data stored in multiple locations but shared and synchronized for all users. DIMONT's Denis Brosan said, "To greatly oversimplify it, having one data file that carried ev- erything that ever happened for the life of a loan, from origination all the way through resolution— and which everyone could interact with—would cut out a tremendous amount of inefficiency and duplication of effort." Symmetry Blockchain Solution's Debbie Hoffman outlined several ways blockchain could prove transformative for the industry—if implemented properly. » RECORD-KEEPING AND SEAMLESS TRANSFER OF DATA—Digitally storing and tracking documents on one central network could automate a seamless flow of data, improving ef- ficiency, and reducing operating costs and processing times, according to Hoffman. "A prime example is in transfer of mortgage servicing rights, which requires a flow of data and informa- tion among all of the parties involved. The blockchain will enable a single source of data to be accessed and reviewed by all of these parties." » SECURITY—Blockchain will also, in theory, make it much more difficult for that data to be tampered with. It would also help prevent the loss of documents and data points stored on it. "It can be a permissioned blockchain so that it limits who has access to documents and/ or terms," Hoffman explained. Moreover, since blockchain is based on a distributed ledger rather than a centralized, primary server, there is no one single point of failure for a data breach or hack. » PAYMENTS—Hoffman told DS News that blockchain could allow for increased liquidity if digital payments were added to the process. "The entire concept of blockchain allows for this facilitation of quicker, more secure, and efficient transactions in both ledger and currency at the same time, without a time delay, and allows for more liquidity in the supply chain," Hoff- man said. However, there are hurdles to implementing blockchain solutions and using them well. "Block- chain only works well if there is an ecosystem among the users of the data; it does not work in a silo," Hoffman explained. As such, parties within the supply chain would need to work collab- oratively on one agreed-upon blockchain technology, or one large market-mover would need to adopt a blockchain and have the various vendors/clients use it. "Other industries are beginning to develop consortiums in this regard," Hoffman said. "While mortgage has a few such groups, there is not yet a single leader, and we are still a very bifurcated industry." Another potential impediment is the regulatory landscape inherent in the mortgage industry. "Any type of adoption of technology requires that the compliance aspects are fully integrated into or compatible with the solution," Hoffman explained. Any large-scale implementation of block- chain will require decisions to made in areas such as what data would be made public or private on the ledger, and then implementing compliance and security checks to ensure everything is up to industry standards. "We've just gone through years of this with TRID and HMDA," Hoffman said, "so our industry may not want to try something new and upset the apple cart." Fannie Mae's Tracy Stephan said that any new tech, blockchain included, must be evaluated through one fundamental metric: does it provide a better solution now than existing systems? "We are watching blockchain pilots closely to see how the technology can apply to the mortgage process, but so far there are more questions than answers," Stephan said. "Our approach to any new technology is informed by the practical challenges and opportunities of our customers, not the promises of tech evangelists."

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