Posturing for Progress

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 30 of 67

Feature Advantage Systems, Equity Loans Unite to Increase Accounting Efficiency In an effort to move with the current of compliance, these two companies have joined together to improve their accounting processes in hopes to set a standard for the industry. Brian Lynch, President of Advantage Systems and Walter J. Werchanowskyj, EVP of Finance for Equity Loans M // Nationally, what lending trends, both positive and negative, are you observing in the marketplace? equity // A positive trend is that interest rates continue to be at a record low—despite the fragile state of the economy—and residential property values have begun to turn. Additionally, there's an effort from both a political and regulatory view to provide assistance to homeowners who were caught up in the economic downturn but want to hold on to their homes even though they're underwater with respect to value. For example, the HARP program assists borrowers who can participate in the lower interest rates at a higher loan to value. In terms of negative trends, the cost to originate mortgages continues to climb along with the effort to comply with increasing regulatory requirements. Equity Loans has gone from a fairly straightforward transaction to making sure that boxes are checked, dates match, a multitude of disclosures are included, etc. If polled, I would guess most borrowers don't even read the mounds of paperwork they receive. Borrowers tend to be more concerned with answers to the following questions: How much can I borrow? What is it going to cost me? What is my payment? Appraisals are also a challenge. The introduction of foreclosure re-sales as arm's length sales practically guaranteed a market decline. There are many good appraisers who work very hard to find comparable properties to provide a representative value for a borrower. Unfortunately, many appraisers get the minimum number of sales without much thought of comparability in a foreclosed "as-is" sale versus an owner-occupied sale containing pride of ownership qualities. It's also a challenge to meet expectations on the timing of the loan origination process from borrowers as well as Realtors. This process has slowed due to more compliance issues and an effort to make sure files are "bulletproof " with respect to future recourse resulting from rep and warranty issues if a great borrower loses a job, resulting in foreclosure. That's not to say that perfect loan files are what we all should strive for, but certainly the process has been slowed at all levels as a result of surviving mortgage bankers who witnessed a slew of buybacks as a result of a box not checked or a missing date in an otherwise great loan that went bad in a troubled economy. M // Nationally, what technology trends are emerging in the lending marketplace? ADVANTAGE // We're seeing a trend towards tablets and smartphones—basically the ability to have information at your fingertips as quickly as you can. We have a new product called ApprovalSoft that's designed to allow people to approve transactions, gather the inventory flows, and gather the approvals needed before they get into accounting. Equity doesn't have that yet, but that's the trend that we're seeing here. One of the products that Equity does have is Web-based reporting. This is another tool that tries to get information to branch managers as quickly as possible. M // Among the wide array of policy and regulatory issues within the financial services sector, what compliance and risk mitigation initiatives are the company utilizing to address these concerns? Equity // Some of the compli- ance and risk mitigating initiatives used at Equity Loans The M Report | 29

Articles in this issue

Archives of this issue

view archives of TheMReport - Posturing for Progress