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55 New and recent advancements in technology are poised to help more lenders and servicers avoid compliance headaches that inevitably lead to reduced efficiency, additional costs, and risk. WHERE AUTOMATION MAKES A DIFFERENCE For the past two decades, the mortgage industry has increasingly leaned on automation to make originating and servicing loans more efficient and less costly. At the same time, the industry has become more regulated, which has pushed up loan costs despite all the technology adoption that has taken place. at doesn't mean automation doesn't work, only that the work of automating compliance and bringing greater transparency to all areas of the mortgage ecosystem is just beginning. With the right automated compliance tools, it's now possible to conduct reviews not just before closing, but during the entire origination process, including at all major loan milestones. Automated reviews can track and document all changes to the loan file, as well as reasons given for any changes through comprehensive reporting. is not only assures compliance throughout the loan-manufacturing process but also eliminates costly stare-and- compare methods of reviewing files by hand. Automation can also be applied to a lender's controls, which prevents new staff bypassing a lender's required processes and procedures under the pressure to perform. ere are tools available that enable lenders to run mock regulatory examinations before they submit their data to federal and state regulators, so they can cure violations before loans close to prevent costly refunds, fines, penalties, and, most importantly, reputational risk. Newer technologies are not only capable of tracking TRID compliance from the initial Loan Estimate until the final Closing Disclosure, but they can also accurately monitor each fee change, which prevents lenders from having to issue refunds later. In developing our TRID Monitor system, we not only helped provide comprehensive disclosure testing and ensured every loan complies with the latest TRID rules and other federal state laws and regulations. We also removed the burden from lenders in determining if and when disclosures were provided to borrowers and read in a timely manner while allowing them to constantly monitor fee changes. Automated compliance technologies can ensure lenders meet investor requirements when it comes to foreclosure timelines as well as meet state and local requirements that affect mortgage servicing operations. Automated compliance technologies are positioned to help lenders answer future compliance challenges as well, including those that have not been resolved. ese include determining if, when, and how missed payments that took place during the pandemic should be used to qualify borrowers and federal RON legislation. e positive impact automated compliance tools have on loan production cannot be overstated. By automating compliance, lenders can reduce errors, shorten closing times, increase loan quality, and eliminate repurchase risk. In fact, lenders that have not yet automated their compliance needs typically end up spotting loan errors 5 or 10 days after their monthly book of business closes, which means they spent the entire month creating loans with the same problems. By addressing the problem as it happens, they can identify the problem early in the process on the first few loans, so they can then address it systemically. is enables lenders to not only avoid issues spiraling out of control, but also minimize the amount of time loans spend on warehouse lines, in essence, saving money. Truth be told, the industry has been relatively slow to grasp how deeply automating compliance can revolutionize mortgage production. Traditionally, the focus has always been on post-close compliance, not consistently auditing loans throughout the transaction. is will change, however. Just as residential lending will constantly evolve, so, too, will technology— and with it, a lender's potential to overcome any compliance challenge. John Vong, CMB®, CMT, is Executive Chairman and Founder of ComplianceEase, a SitusAMC company providing industry-leading regulatory compliance software solutions to the U.S. real estate financial industry. He can be reached at j.vong@ ComplianceEase.com.