Data Matters: Loan Origination Data Silos Matter
May 26, 2011
Having spent the past couple of weeks on the road visiting mortgage bankers, I am even clearer on why the mantra Data Matters bears repeating in our industry. I am also reminded that listening to lenders talk about their business circumstances--challenges and opportunities--is one of my most enjoyable duties.
This trip included visits with clients and prospective clients that ran the gamut of mortgage banking diversity. I met with some lenders that only do retail business; some that are strictly wholesale; some that do both; and a handful that are also correspondents buying closed loans to bundle up for higher margin sales.
Although their businesses were each unique, two characteristics emerged common to all of them:
- They had a lousy Q1 compared to the last quarter of 2010; and
- They still expect their business to grow dramatically by the end of the year.
You cannot fault the enthusiasm and optimism out there. Personally, I love it. I also love that each company has a plan that they are executing against in order to achieve their goals. In truth, their plans revealed a recurring third element that all of these mortgage bankers shared:
- They are all very frustrated with their current technology platforms.
To read the full article, click here.
Data Matters: Back to the Future Through Compliance
May 5, 2011
We’re seeing an interesting parallel between today’s heavily regulated lending environment and the sub-prime/Alt-A lending era from a few years ago.
In those days, a lender had dozens and dozens of investors eager to buy their closed loans. Each investor offered-up its own guidelines and pricing models as they fought to win business from lenders. Everybody sought a creative loan program that they could market to borrowers as unique. From a lender’s perspective, these were the “good ol’ days” because they could actually compete for business based on attributes other than price and service.
One problem lenders faced was keeping up with constantly changing guidelines and pricing rules that their investors were throwing at them. Lenders essentially fell into one of three buckets:
To read the full article, click here.
Data Matters: Ending Up Where We Started
April 3, 2011
When I was a kid, we played what I remember as “the telephone game” during recess. You know the one where one kid thinks up a phrase, and then whispers it to the kid next to them, who whispers it to the kid next to them, and so on. Of course, after the phrase is whispered to the last person, who then says what they think they heard, everyone cracks up because the phrase bears no resemblance to the original message.
That’s a fun game for school kids, and a useful analogy to understand an expensive mortgage lending business practice.
If the challenges lenders have faced in the market over the past couple of years have taught us anything, it is that the more accurate the flow of information passing between participants in the mortgage process, the lower the risk of taking a loss on that loan. Today’s “new rules” mean that loan information taken at point-of-sale, processed and sent to underwriting has to be the same loan information on the closing docs and delivered to the buyer on the secondary market.
To read the full article, click here.
Reconsidering data integrity as a secondary-market strategy
March, 2011
The mortgage banking industry is going through a tough time - low volume, "vanilla" products, thin margins, challenging regulatory requirements, compensation contratints, foreclosure-gate and licensing issues. Many lenders have gone dark (some by their own choice, but most by external forces.) Others struggle to keep their doors open.
Yet, many mortgage bankers view the current state of the industry as an opportune time to seize market share, and they are growing their business at an unprecedented rate.
What are they (the successful lenders) doing to bolster their success in the market?
To read the full article, click here.
Attitude Matters, Too
March 1, 2011
Perhaps you’ve heard the old Turkish saying, “the fish stinks from the head.” I’m sure you can figure out what this means when it comes to seafood…what is more relevant is what it means to your mortgage lending business.
If your company isn’t running well today, and your staff is walking around with a nasty attitude towards “all of the changes and chaos the mortgage banking space is going through,” you need look no further than the corner office to understand why.
Don’t get me wrong. There certainly is a lot going on that is worthy of complaint. Most commonly people are frustrated by the potential impact of Dodd-Frank and Loan Officer Compensation changes, along with the lack of clarity on how to interpret those changes. Other folks are complaining that they don’t have enough loans coming in the door, especially with rates on the rise. And then there are the lenders that are going nuts because they are experiencing poor support from their vendors. One of my clients summed it up aptly when he called this space “a dog’s breakfast” right now--it’s a mess and it stinks.
To read the full article, click here.
IDS Builds new interface with Del Mar DataTrac's Software
February, 2011
Salt Lake City-based International Document Services (IDS), a mortgage document preparation vendor, and San Diego-based Del Mar DataTrac, Inc., a provider of mortgage lending automation solutions, have rebuilt their partner interface to improve mortgage lenders' experience with the idsDoc platform and the DataTrac loan origination system (LOS) of record.
To read the full article, click here.
Data Matters: let's take it from the top
February 2, 2011
When you stop to think about the state of affairs for mortgage lenders in 2011, it can make your head spin.
In January alone, you were faced with changes to the Truth In Lending Act and a new risk-based pricing notice. In only a couple of months, when April hits, we’ll have to deal with the first phase of loan officer compensation changes, not to mention the move from Home Valuation Code of Conduct to appraisal independence.
Then, in July, the true impact of Dodd-Frank will begin to be better understood, with launch of the new regulatory agency, the Consumer Financial Protection Bureau. Although no one knows what the new rules will be, we do know that they will touch on changes to Home Mortgage Disclosure Act reporting, Higher-Priced Mortgage Loans and the Home Ownership and Equity Protection Act. And there will be an impact on determining what is a qualified mortgage based on the borrower’s ability to repay.
Then, there is also the possibility that the Good Faith Estimate and TILA will merge, and there will most likely be more updates to various disclosures. Oh yes, and probably further restrictions on loan officer compensation.
To read the full article, click here.