$1.2 Billion Mortgage Banker Castle & Cooke Mortgage Credits DataTrac for Pain Free Compliance Without Workflow Adjustments or Added Staff
Company
Castle & Cooke Mortgage, LLC, is a $1.2 billion mortgage lender based in Salt Lake City, Utah, with branch operations in Arizona, California, Colorado, Hawaii, Idaho, Iowa, Nebraska, Nevada, New Mexico, North Carolina, Oregon, South Dakota, Texas, and Utah, and a total production staff of more than 325.
Challenge
Like other independent mortgage bankers, Castle & Cooke Mortgage is dealing with new investor standards and regulatory requirements, while at the same time it is looking for ways to increase loan volume and profitability. In keeping with its founding principles of operating a lean, scalable, quality-obsessed mortgage lending business, Castle & Cooke Mortgage decided to adapt to industry changes without adding staff by leveraging rules-based process automation.
Solution
Castle & Cooke Mortgage has fine-tuned its lending processes with DMD’s DataTrac Suite as its system of record since 2005. According to its president, Matthew Pineda, due to the “zero-defect” processes built into and enforced by its paperless automated loan origination workflow platform, Castle & Cooke Mortgage’s adoption of new investor and regulatory requirements has been largely pain free.
Pineda credits DataTrac with Castle & Cooke Mortgage’s ability to quickly adapt to a changing compliance landscape while continuing to execute on his vision for operating a progressive, responsive lending business that grows even in a down market – without adding staff.
Results
Castle & Cooke Mortgage leverages DataTrac Web (formerly known as WebTrac) as its interface portal where field loan officers can submit applications from commonly-used point of sale systems into the corporate operations; check the underwriting status of every loan 24x7; request rate locks; and review fees before closing document packages are created.
The DataTrac Electronic Document Management (EDM) paperless engine (formerly known as DocumentTrac) allows Castle & Cooke Mortgage production offices to submit imaged files in real time from point of origin directly into the corporate system.
“Understand, we’re not talking about emailing pdfs, which does not constitute paperless lending – just paperless delivery,” explained Pineda. “Our entire loan production system is paperless and prevents the submission of incomplete loan files.”
Back office users are alerted whenever a new document has been added, and they have instant access to view and annotate pages easily and securely from any web browser.
DataTrac provides company-wide pipeline management for underwriting, secondary marketing, and for all fulfillment efforts including closing, funding, accounting, and shipping. Castle & Cooke Mortgage’s closers generate fully compliant document sets with two clicks of a mouse by leveraging DataTrac’s seamless interface to DocuTech’s ConformX system – one of DMD’s strategic partners. At the end of the process, a shipper delivers an automatically fully audited and programmatically stacked loan file to any of their investors in a matter of seconds.
“As far as operations go, we use DataTrac for everything,” said Pineda. “Its ability to handle our company’s production growth and adapt easily to external changes is what makes DMD technology priceless.”
For example, after funding $340 million in loan volume in 2008, Castle & Cooke Mortgage funded $1.2 billion (5,867 loans) with the same staff in 2009 – a 353% increase. According to Pineda, Castle & Cooke Mortgage has not needed to hire in order to accommodate the company’s explosive growth because DataTrac expands with the company’s needs. According to Pineda, similar-size mortgage banks typically have 25 underwriters, a dozen closers, and 14 shippers, while Castle & Cooke Mortgage operates with four underwriters, two closers, two shippers, and one funder.
As for responding to new investor and regulatory guidelines, Castle & Cooke Mortgage hasn’t seen a need to change its lending processes or add staff to ensure compliance.
Once the underwriter has signed off on the loan, it cannot be altered or added to in the process, preventing data misrepresentation – or inadvertently violating a regulation or point of compliance, since the loan moves from application to shipping without being changed – with the exception of approved actions taken during underwriting.
“Industry changes haven’t forced us to change our workflow,” Pineda said. “Our system gives us the flexibility to accommodate the demands that the industry has placed on us without adding extra time per file.”
DataTrac EDM empowers Castle & Cooke Mortgage’s staff to underwrite a conventional loan in 15 minutes. Navigating through a loan file is dramatically easier and more efficient when clicking on thumbnails and using the built in electronic table of contents. Underwriters can instantly get to the information they are looking for – even when files contain hundreds and hundreds of pages – for Pineda, the major advantage of true paperless lending. By giving its underwriters the ability to actually work on a file rather than work to get through a file, Castle & Cooke Mortgage is confident that its loans are compliant, and that RESPA requirements are being met. DataTrac’s business rules and file auditor help to ensure virtually nothing is missed.
“In compliance, I rely heavily on the utilization of DataTrac business rules,” said Castle & Cooke Mortgage national compliance manager Stacy Anderson. “Since we are able to implement the rules based on our specific company parameters, I feel confident that the information I submit for annual reporting is complete and accurate without double checking the data. It is a great feature that saves hours of labor.”
Castle & Cooke Mortgage makes far fewer mistakes working with electronic document management because the image and the file that an underwriter starts with are identical to those that its shippers are sending electronically to investors and/or Fannie Mae. Since DataTrac allows Castle & Cooke Mortgage underwriters to handle their workload efficiently and accurately, they have not needed to add underwriters for quality checks.
“DataTrac’s rules-based workflow environment takes the guesswork out of doing forensics on non-compliant loan files by eliminating the need to trace a file to the point, and to the person, where an error was made,” Pineda said. “Not only does the system prevent a non-compliant loan from advancing, but it also notifies the violator of what was done incorrectly.”
After the system points out an issue once or twice, people learn quickly, and they don’t make those mistakes again, he added.
For Castle & Cooke Mortgage, the DataTrac Suite not only delivers zero-defect workflow and true paperless lending, but it also adds an element of process reinforcement that keeps loan officers on top of their game, and allows management to isolate issues before they can become full-blown problems.
According to Pineda, DataTrac reinforces and supports those elements of Castle & Cooke Mortgage’s operation that most clearly differentiate it, and allows it to compete effectively in a shrinking market.
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