MReport April 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 15 of 67

14 | TH E M R EP O RT COVER STORY T he high-speed vortex that is the mortgage indus- try pulls in big and small, new and old: from behemoth banks to fresh, nimble FinTech firms, legacy systems to the latest apps, and big data down to the smallest loan application detail. The only constant is change—and challenges. That's why PwC listed artificial intelligence and blockchain technology at the top of its 2017 list of financial services issues. Cybersecurity and robotic process automation are also in the top 10. But faster-cheaper-better is very difficult to achieve in the high-demand mortgage industry without the right tools. Like find - ing a rent-controlled apartment in Manhattan, tech is here to stay. "The industry seeks to benefit from the pure efficiency of digi - talization to communicate with stakeholders more smoothly," said Kyle Rothfus, Director of Business Development at Detroit- based Nexsys. "We see that in online mortgage origination with things like better smartphone options or cloud storage for documents. Everyone is ready for upgrades." How can mortgage profes - sionals harness so much vital customer data and distil it down to the accurate, actionable info they need at the exact moment they need it? Chris Hovey , COO at Arch MI, said he believes "the avail- ability of accurate and current big data will become more common- place, driven by greater access to data via APIs (Application Programming Interfaces) from large industry providers." According to Hovey, APIs will help the industry analyze the seemingly infinite info collected to improve loan quality and turn times, reduce fulfillment costs, and, of course, deliver a bet - ter customer experience. Hovey said APIs will also improve risk management practices through enhanced identification of risk pat - terns and isolation of new threats. Bill Mohler, Chief Product Officer at Clarocity, cited Rocket Mortgage by Quicken Loans and Opendoor as notable examples of successful industry disruptors in the name of consumer conve - nience. "There are also tremendous ad- vancements in platform technolo- gies that essentially provide the operating system for the mortgage industry," Mohler said. "If you look at the GSEs, it's clear that UCDP (Uniform Collateral Data Portal through which lenders can upload appraisal data and moni- tor mortgages delivered to Fannie Mae or Freddie Mac) is part of an overall platform strategy designed to not only support their second- ary market lending, but stream- line the process and manage risk." As far as risk goes, TRID is old and new news in the mort- gage industry. The "new" part is the continued evolution of best practices in the face of "know before you owe" regulations. Tech is helping with these as well. "The newest thing in mort- gage tech is creating strategies for TRID compliance and third- party risk avoidance that scale," said Cheri Lines, Director of Technology at Nexsys, which is currently focused on integrated vendor management and trans- actional solutions. "Many lenders have already thought of internal risks, but start sweating bullets when external service provid- ers come on board. Who doesn't want a solution to help navi- gate regulatory change and stay agile while they grow? On the provider side, these companies and individuals want to join a network built for transparency and trust because that attracts the best lenders." High-Speed Halt? A ccording to a 2016 NTT DATA Consulting survey, 70 percent of banking executives expressed frustration with their core systems, 100 percent said their institution's core system posed at least one major chal- lenge, and nearly three out of every 10 leaders cited the cost of maintaining legacy systems and the complexity of integrat- ing with other systems as their major challenge. "Reliance on older and inflexible technologies increases the cost of support and the timeline required to add new vendors, new prod- ucts, or to maintain compliance with the latest regulatory changes," said Hovey, who asserted that the industry should do a better job of holding tech vendors accountable for their "ever-increasing service fees and ridiculously long develop- ment cycles." But these legacy systems are on their way out, and accord- ing to Shane Leonard, Chief Information Officer at Selene Finance LP, the industry is headed toward more process- specific systems instead. "I believe the industry needs to be less concerned with the system of record and instead focus on the data of record," Leonard said. "We're going to Launching New Technology Mortgage industry forces produce big company needs, and tech tools and innovations provide the keys. By Brian A. Lee

Articles in this issue

Archives of this issue

view archives of TheMReport - MReport April 2017