Decoding Compliance

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feature Safety Not Guaranteed M obile technologies—particularly apps—are the latest tools of interest for originators, servicers, and banks, according to Bien-Aime. But that doesn't mean the industry has been quick to adopt smartphone- and tablet-based platforms. Focardi, who predicted mobile apps will eventually be popularized in the housing finance sector, elaborated on the benefits, stating, "If you want to sell real estate on Sunday and [if your customer is] prequalified and wants to put in a bid that night, you can qualify [him or her] for the mortgage right there on your mobile app and [he or she] can buy the house instead of waiting." Reiterating that all mortgage professionals' time is at a premium due to market competition, Bien-Aime lauded mobile technology's ability to serve as "an extension of a system outside the workplace; you can get a check and go to a closing, take a picture of a check, and deposit it into the bank that day. It's things like that that help leverage what you already do, but help do it faster." So why hasn't the mortgage banking marketplace maximized mobile capabilities like other industries? Because lenders fear that potential security issues and fraud risks could cancel out efficiencies created by such tools. Novy commented on the problems, perceived and legitimate, that can be created by mobile technologies, stating that the risk of fraud is only a key concern when proper safeguards aren't in place. Though he understands banks' hesitancy to conduct business online due to possible data corruption or disruption, Novy cited Internet-based operations as a necessary tool of survival, adding, "They have to adapt, or they're going to be overrun." According to CoreLogic's 2012 Mortgage Fraud Trends Report, the company's National Fraud Index has trended upward 28 | since early 2012, and CoreLogic estimates that this bounce, along with expected increases in mortgage volumes will ultimately translate into $13 billion in fraudulent U.S.s residential mortgage originations in 2012, an increase from the estimated $12 billion in fraudulent origination in 2011. Javelin Strategy & Research, meanwhile, debuted its 2012 study on online banking, revealing that consumer reticence about mobile avidly adopting mobile apps: websites for homebuyers, such as Zillow and Trulia. Stating that the sector is paving the way for lenders' eventual gravitation toward mobile tools, Novy cited apps' ability to speed up the mortgage loan process through pre-approvals and an approach that's less "paper intensive" for originators. Novy's choice among the wide array of real estate apps was "If you don't meet compliance regulations, you're pretty much going to be out in the cold." — Vlad Bien-Aime, Global DMS banking is fading rapidly. The number of survey participants concerned about safety issues when conducting transactions online dropped by 11 percentage points during the year, while the number of consumers who now classify mobile banking as "safe or very safe" has nearly doubled between 2010 and 2012, according to Javelin. Additional information from Forrester Research's report, "The State of Mobile Banking 2012," indicated that the number of U.S. mobile banking users will likely double in the next five years, reaching 108 million by 2017, accounting for 46 percent of U.S. account holders. One segment of the mortgage and housing industries that's developed by Casmy, and he described the platform as one of the best examples of emerging mobile products, due to its aggregation of statistics including open house data and mortgage approval. "We'll see these types of applications come out that will start to marry the prospective borrower with the real estate transaction. It's a much closer environment than ever; we're starting to see technology where Realtors and mortgage lenders are working closer and getting their information to work for the benefit of the applier," Novy commented. Unsurprisingly, tablets also are starting to gain momentum in the mortgage process. Iannitti stated that borrowers crave the convenience of integration with their iPad or smartphone, adding that borrowers want a way to monitor the status of their loan 24/7 and desire constant contact to help complete a deal quicker and more efficiently. He also expects an ongoing push toward streamlined, regulated communication with borrowers that will make mobile technology even more important to lenders. Bottom line: Originators, servicers, and banks seeking to remain ahead of the curve should be actively planning for a very mobile future with strategies and programs that will meet the increasing demand for smartphone platforms and apps. Tech's Next Generation L ooking into mortgage technology's next phase of development, Novy predicted a growing appetite for tools that link the full lifecycle of the homebuying process—from sourcing a property for purchase to qualifying for a mortgage, borrowers are eager for more comprehensive, connected tools, online resources, and mobile apps. For industry professionals, lenders' retention of offsite or virtual personnel for underwriting and approval of mortgage loans will continue to change the way loans are submitted and processed. Novy believes that employees working for field offices might soon experience both the positive and negative effects of current technology advancements. The upside: the ability to work from home or a remote office. The downside: the potential for companies to cut jobs accordingly. In closing, Cash harped on mortgage industry technology's biggest bonus: a wider pool of borrowers. Online tools give originators the ability to work outside their "normal" market and operate more globally, said Cash, adding, "Your customers don't always have to be in your 'back yard' anymore." The M Report MR

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