Technology has a number of driving forces that spur development at different points in time, but today, most mortgage industry professionals would agree that no force is stronger than a lender’s need to meet compliance expectations. Despite the surge of technology designed to address these regulations, a complication exists that keeps many lenders from pulling the trigger on new technology and beginning to realize the ROI of an efficiently flowing system: The looming and unwritten regulations to be finalized under the Dodd-Frank Act (or perhaps the compliance guidance we might not even see coming).
Lenders today are in the precarious position of receiving guidance that requires immediate action and the trained belief that changes are going to keep coming. However, I challenge the notion that technology adoption should wait until after the dust settles for two simple reasons. First and foremost, changes to requirements will not stop coming. Policies tend to give rise to new parameters and if we’ve learned nothing yet, we need to learn how to continually adapt. Secondly, lenders should consider that the best position to find themselves in when the next regulation change comes down the pike is a verifiable understanding of where operations are today. That is precisely what well-implemented technology can help a lender achieve.
Let’s look at one example of how the right technology platform can keep a lender on track and, at the same time, remain adaptable for what’s to come. Certainly, in the past five years, we’ve seen the definition of “compliant valuation ordering” evolve, and it will likely do so again. A strong valuation management platform should be able to assist a lender in managing their own appraiser panel, AMC relationship and the procurement of other valuation types (AVMs or BPOs). High-functioning platforms will allow lenders to set automated rules for valuation orders, which are designed to align with the lender’s policies and procedures and should be adjustable as internal or external forces require changes. As an order is placed, the transaction should be time and date-stamped such that each transaction will exist in an audit trail which the lender can later use to support how its policies and procedures were carried out as a measure against the regulations at that point in time.
The system accumulates data on the vendors, as well as on the valuation products returned. This data gives lenders a factual basis to determine whether the vendor should continue to receive valuation orders from the lender, and in turn, gives regulators a clearer understanding of what transpired within the lender’s operations at a given point in time. So while the lender is benefiting from the ROI on an optimized vendor management program today, they will have a concrete set of facts on how their vendors performed and were managed when the next industry shift occurs.
By setting up operations to manage for today’s needs with flexibility to adapt to tomorrow, lenders can find themselves in a position to keep up with regulations–even those that have not yet been delivered.
David Rasmussen is senior vice president of operations at Veros Real Estate Solutions. For more information, call (714) 415-6300 or visit Veros.com.
