MReport March 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

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20 | TH E M R EP O RT COVER STORY Certainty from the GSEs. Over time blockchain will become an absolute must-have but I don't see that happening at least until 2020." Yet, the industry must take heed of data security in an increasingly tech-heavy environment. Loss and Recovery G iven the way information is shared in the digital space, a white paper by CertifiD, a real-time identity platform noted that mortgage payoffs were prime targets for fraudsters. The report found a steep rise in the use of spoofed mortgage payoffs by cy- bercriminals in the title and settle- ment industry while highlighting five areas of risk associated with these statements. They included spoofed lender payoff portals, lender payoff statements, payoff received from current borrowers, land contract payoffs, seller-held mortgages, and other third-party payments, and payoff trolling. Robert Siciliano, CEO of Safr. Me, who led a panel discussion at the National Association of Real- tors' recent Realtor Conference and Expo 2018 said that every few seconds someone's identity was stolen because of a data breach, computers were hacked or credit cards were compromised. "As a result, businesses and reputa- tions are experiencing security risks many are not prepared for," he said. "The system we func- tion under, combined with the conveniences of technology can be easily flawed by simple scams." As mortgage banking increas- ingly relies on digital technology to support loan origination and servicing functions and often replacing traditional documenta- tion with electronic data, there must be an unrelenting focus on data security and cybercrime, according to Regina Lowrie, President and CEO of RML Ad- visors. "While digital lending and technology may drive lower costs to originate and service, under- standing and managing the risks attendant with digital transforma- tion is paramount," she said. Additionally, Lowrie pointed out that while there's lots of invest- ment and focus on POS systems to improve pre-qualification pull- through, the must-have technology for 2019 "is cybersecurity and com- bating wire and identity fraud." "Regrettably, there's a lot of misunderstanding about E&O insurance, CPLs and other coverages that are perceived to cover cyber-crime and privacy," she explained. "Any lender who is at least not validating wire instructions certainly needs to be prepared to not only absorb the capital loss, but also cover the typical 100 hours of management time and legal costs to attempt possible recovery." Despite these challenges, technol- ogy has certainly made the job of processing a mortgage much easier. "Innovation that transformed the landscape in retail, medical, insurance, and travel landscapes has finally made its way to the mortgage industry, and the voice of the customer has never been louder, Revard said while making a case for the rise of technology in the mortgage industry. Competitive Edge Y et to succeed in this market, lenders must have technol- ogy that is capable enough to get homebuyers into their dream homes faster, customize engage- ment with their unique custom- ers, stay in contact throughout the process and respond to homebuyers' needs on their terms, according to Tyrell. "To make this possible, more mortgage lending companies are working with de- velopers to create robust technolo- gies that meet the specific needs of their consumers and investors. While the industry has made great strides in offering a digital mortgage experience, no one company has addressed the entire range of issues in today's highly fragmented market," he said. Kuentz agreed. He said that the definition of digital lending had been sporadic, meaning different things to different lenders. How- ever one constant remained that providers in the market wanted to be technology partners for the future rather than just solving mi- nor problems. "What that means is that we must be willing, as a provider, to get outside our own comfort zone. For providers this means that they must be able to solve critical problems in order to be viewed as a true partner rather than offering a single solution to create win-win synergies." According to Revard, the prominence of lender compe- tition online along with the notable compression of the home shopping cycle by companies like Zillow, Redfin, and Trulia, has heightened the complexity of acquiring tomorrow's customer. "It is crucial for lenders to develop the resources, bandwidth and execution prowess to engage con- sumers much earlier in the home buying process while staying true to key fundamentals supported by data," he said. A good place to start that process, Kuentz explained, was to really understand where the process breakdown occurred. "That may be through technology, but it may just be through better ways to streamline your process, perhaps even through outsourcing," he said. "It doesn't necessarily have to be a piece of technology, it can be how we leverage other ways to outsource components of the process, which help us to be able to take something from 35 days to close down to 10 days to close." To do that, he said lenders needed quick adoption and train- ing. "We need more clarity so that consumers and loan officers start to gain that level of confi- dence that this sort of adopting can really streamline the process of lending," he said. RADHIK A OJHA , Online Editor at the Five Star Institute, is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master's degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Dallas, Texas. You can contact her at Radhika. Ojha@ "The real differentiators in the mortgage industry in 2019 will be the lenders who can build a 'one-touch' mortgage experience and offer upfront mobile engagement designed to quickly remove the client from the shopping pool. These truly advanced companies will offer consumers a sophisticated, easy-to-use experience through a one-touch technology platform that helps reduce overall costs." —Mark Revard, Eastern Division EVP and Head, Gateway Mortgage Group Innovation Council

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