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26 | M R EP O RT FEATURE ing partner's margins directly as well as indirectly. It is also simply less time consuming and less expensive to manage fewer vendors, especially if they are able to process the same or similar amount of throughput the lender had previously relied on a higher number of partners to manage. It means a need for smaller vendor management resources. It means decreased administrative requirements. Plus, reducing the number of touch- points between lender and provider also means improved communica- tions, reporting, and oversight, not to mention the ability to adjust to market conditions faster. The Way Forward I t shouldn't be forgotten that this process should begin with a thorough vetting and analysis. Not every large or national service pro- vider is built the same way. Big isn't automatically better. Lenders should be certain the selected providers, in addition to being able to manage large amounts of volume, are operating efficiently in their own processes … and that their own compliance programs are updated, enforced, and continuously im- proving. In an active enforcement environment, it could only take one violation and enforcement action to turn a lender's biggest concern from margin compression to being able to keep the lights on if the violation is significant. And while lenders aren't always directly responsible for a service provider's compliance failures, there are innumerable ways in which a vendor that isn't minding its compliance require- ments can damage its lender clients. In a competitive marketplace where lenders may well be cutting back on their support resources, there are a number of nationally capable service providers who also deliver added value to their clients in those very areas. A service provider can be a powerful asset to a lender doing business in numerous states, even if just by helping the lender stay abreast of legal developments that could affect them. A lender consolidating its service network should strongly consider what resources, in addi- tion to the core service for which it's contracted, a service provider can add to the picture. These can include various types of training, compliance, and even technologies that directly benefit the lender with increased cost savings or by helping to compensate for a lender's di- minished expenditures on in-house support resources. Finally, a lender seeking to consolidate its service provider network should be seeking out potential partners who, while large enough to manage signifi- cant volume effectively and cost- efficiently, is still nimble enough to align its processes with a lender's workflow. If a service provider cannot provide a seam- less link to a lender's preferred LOS, for example, the savings gained through consolidation in the first place will inevitably be diminished at some point, espe- cially in a market where cost and turnaround time are crucial. A competitive purchase market is something the mortgage industry has not truly seen in a significant amount of time. In all likelihood, some lenders, having entered the market during the "easy money" days of the refi boom, are just as likely to bow out in the coming months. However, just as was the case in years past during the transition from one market cycle to an- other, most mortgage lenders will choose to compete in what will remain a strong market. The best lenders, however, will thought- fully consider their strategies for addressing the inevitable shrink- ing of margins. And quite a few of those winning strategies, at least for multi-regional or national lenders, will include the thought- ful consolidation and leveraging of their national service provider networks. A mortgage and real estate veteran of almost 20 years, REGINA BRAGA is the COO for national settlement services provider, Res/Title. There, she is responsible for all day-to-day operations and workflow management as well as maintaining multi-state compliance regulations and protocols to partner with their national mortgage lending clients. She can be reached at RBraga@Res-Title.com. Learn more about Res/Title at Res-Title.com. SOMETIMES, IT'S GOOD TO BE A FOLLOWER. Follow MReport on social media to put the latest mortgage banking news, stories, strategies, and insights at the touch of your fingertips. MReport @TheMReportNews The MReport In all likelihood, some lenders, having entered the market during the "easy money" days of the refi boom, are just as likely to bow out in the coming months.