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August 2023 » thefivestar.com 59 August 2023 prevent mortgage companies from operating entirely remotely. Since then, a number of states have enacted regulations that enable originators and servicers to use remote work- ers permanently. Many mortgage companies now offer remote work as a perk, which enables them to recruit from a larger pool of talent. Q: What challenges did this present to lenders? There were multiple challenges. For start- ers, mortgage companies had to figure out if their employees' network access was secure and if they had adequate internet speeds to perform their jobs unimpeded. They also had to make sure that the remote employees were complying with agency and government guide- lines, requirements and regulations, especially those regarding customer privacy. For example, if an employee is working with borrower data, they shouldn't be using an at-home printer or working from a public library where others may have access to that information. Most lenders have no idea whether their employees are doing these things unless they have the right tools in place. Q: What precedent did mortgage employers have to draw on when they made the widespread shift to work-from-home models? There really wasn't any precedent. It's important to understand that the vast major- ity of mortgage industry professionals, like most Americans, had never experienced working from home. Until recently, working from home was something you could only do if you were a freelancer or a consultant. For the past 60 years, people have primarily com- muted to offices, retail stores, manufactur- ing facilities, or other locations. When 2020 hit, suddenly you had practically the entire industry working from home at once. It was a huge shift that happened so fast that regula- tors are only now beginning to catch up. In fact, the "rulebook" for having remote employees is still being written. For instance, the MBA recently created proposed model legislation to help individual states make the flexibility they offered lenders during the pandemic permanent. The trade group also expects regulators will eventually require lenders to keep lists of all their remote em- ployees as well as the hardware they're using and a security log of remote logins. There are no precedents for any of these things. Q: How can mortgage companies efficiently address all of these concerns without the travel expense associated with recurring on-site inspections? Thankfully, recent technological advancements have made it possible for companies to perform inspections of an employee's home office or their branch offices remotely. Through tools such as the geo-tracking function on the employee's own phone, remote verification of the employee's IP address and internet connection speed, and secure video technology combined with employee input, mortgage organizations can confidently confirm that their team members are safe and working in a compliant manner, no matter where they are. In addition to helping lenders stay compliant, remote inspection technology enables lenders to continue to safely recruit and maintain a distributed workforce, which helps bring their overall operating costs down. At a time when every lender is looking to trim costs to offset the impact of higher rates on their loan volume, that's an enor- mous advantage. Q: How does the need for verification of work-from-home staff vary between mortgage lenders and other companies? Every company that operates a remote workforce needs to monitor what their employees do, but we have found the most demand for remote office inspections comes from the most highly regulated industries. So, mortgage companies, real estate firms, banks, wealth managers, and other financial service providers are most interested in the services we are offering. In the mortgage industry alone, the rules about what employees can and cannot do are so specific that they're often taken for granted. For example, if you have someone working with an FHA borrower from their home office, HUD policies demand that the employee's computer screen not be visible to anyone else in order to keep the borrower's data safe. With the right technology, lenders no longer have to take an employee's word that these things aren't happening—they're able to know for sure. "For the past 60 years, people have primarily commuted to offices, retail stores, manufacturing facilities, or other locations. When 2020 hit, suddenly you had practically the entire industry working from home at once." —Rob Nunziata, Co-Founder and CEO, ActiveComply E X P E R T I N S I G H T S