DS News - Digital Archives

» VISIT US ONLINE @ DSNEWS.COM COVER STORY COVER STORY INDUSTRY INSIGHTS B orn from a deluge of defaults and the half-decade of unprecedented foreclosure and REO volumes that resulted, new compliance laws and regulations are popping up across all facets of the mortgage industry. Increased oversight and scrutiny has come in the form of the Dodd-Frank Communication and Transparency The Office of the Comptroller of the Currency (OCC) has established standards on the way defaulting homeowners must be handled, and appropriately communicating with these borrowers is of utmost importance. A provider of loan document and electronic delivery solutions, DocMagic has introduced an interactive smartphone application that serves as a communication tool between lenders and borrowers. Known as BorrowerMobile, the app was developed with the understanding that the modern borrower is on the go—and in order to keep up, the mortgage loan process must be adaptable enough to respond to the borrower's nature. The process is simple: Lenders invite borrowers to download the application onto their devices, and the system creates a communication channel between lender and borrower, which allows the parties to interact and share from any location—providing instant and secure communication. The app also ensures transparency in the loan process as borrowers can, at all times, access their loan status. This in turn provides the borrower an opportunity to anticipate the next steps of the process as well as electronically satisfy loan conditions and sign documents with eSign capabilities. Lenders can provide borrowers with a to-do list, allowing them to satisfy a catalog of conditions—and as they do so, their application notifies the lender which conditions have been met. BEST PRACTICES POINT— COUNTERPOINT REGIONAL SPOTLIGHT Ryan stresses mortgage professionals today must not only conform and acquiesce to regulations but must also yield to scrutiny. "It is not enough to comply; you must also be able to prove you have complied," Ryan said. "This means that you must keep records and audit trails. You must be able to say who completed a task and when, and who authorized signoff and when. You must ensure that the correct process was followed and that the right decisions were made by the appropriately trained personnel, whether in the field or in the office. You must ensure third parties working on your behalf are equally well trained, tracked, checked, and managed. And by the way, you must do all of this while the rules change and evolve around you." The modernization of compliance via today's technological tools makes keeping up with compliance—and its complicated register of checks and balances—a little easier by integrating with strategies already in place and plugging gaps in protocol with standardized procedures. Furthermore, today's compliance technology allows for efficient analysis of results with the capability to recognize violations electronically, reducing the chance of human error. To help lenders, servicers, valuation professionals, agents, brokers, and compliance personnel stay ahead of compliance issues, DS News profiled a handful of innovative technology providers that are leading the way to ensure the industry remains current and compliant on all rules, codes, and procedures. THE BIG PICTURE Wall Street Reform and Consumer Protection Act, the Consumer Financial Protection Bureau's (CFPB) national servicing standards, the Ability-to-Repay stipulation of the new Qualified Mortgage (QM) standard, California's Homeowner Bill of Rights, federally mandated background checks and vendor management policies, and the retooling of Real Estate Settlement Procedures Act (RESPA) disclosures—not to mention the yet-to-be-defined Qualified Residential Mortgage (QRM) benchmark, the outcome of countless unsettled legal actions, and the many additional consumer protections likely to come from the CFPB. These new standards require strict adherence. Compliance in today's mortgage industry is not just here, it is here with a vengeance, according to Seán Ryan, CEO of enterprise software provider Aspen Grove Solutions. 47

• Cover