MReport March 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

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Page 22 of 70

TH E M R EP O RT | 21 COVER STORY the lines of business is a significant challenge," said Kevin Brungardt, CEO RoundPoint Mortgage. "To accomplish this, you need the right tone from the leadership of the organization, the right people, and the right processes." Utilizing technology is also a fundamental way for companies to constantly adapt. In late 2016, the CFPB warned that technolo - gies used in the industry were antiquated and contributed to many of the existing issues, ac- cording to Jacqueline Comeau, EVP, Compliance & Enterprise, Firm Solutions. "The CFPB echoed their origi - nal concerns again in 2018. To add to the complexity of this issue, we have not seen a reduction in legal and regulatory activity," said Comeau. "Innovative technol - ogy solutions are required in the industry for both servicers and law firms to remain compliant and competitive in today's landscape." The vast majority of mortgage companies rely on an off-the-shelf loan origination system to take and fulfill their mortgage applica - tions. Macdonald believes these off-the-shelf programs are great at achieving minimum compliance requirements, but should mortgage professionals really settle for mini - mum compliance? To make regulatory compliance easy and seamless, technology resources are needed. As Steve Jobs once said, "simple can be harder than complex." It is up to the professionals to make regula - tory compliance simple—that is extremely difficult to do without customized or proprietary tech- nology. Technology response needs to be nimble, agile and flexible. This requires ensuring that both lender and technology providers have a mutual understanding of the critical core components needed and that the providers have the capability to develop scalable tools and workflow processes. Companies beginning their own internal monitoring as early as possible will provide lenders the opportunity to see if there are any signs of disparate treatment of protected classes. "This will provide the opportu - nity to make the necessary correc- tions affecting the consumer," said Kramer. "If the institution is unable to build its own decisions and pricing regression models, it should consider outside vendors for help." Sarah Millard, General Counsel and EVP at Arch MI, advised that when working with a third-party vendor, it is all about balance and finding the right standards. "There is currently a void of industry standards as it relates to third-party vendor management that needs to be filled," Millard said. "That standard must not be static, since the risks are not static, but should still drive more uniformity than currently exists. Uniformity will allow companies to streamline their processes and then maybe spend fewer internal resources having to deal with the lack of uniformity." Companies' operation expenses become a part of the insurance premiums that they then charge— creating real costs that will rise, and that's true with all compli - ance costs. Ultimately the costs have to be absorbed somewhere, and that tends to be passed on to the consumer. "I think the key is balance," said Millard. "So that you can meet all of your priorities, com - mercial and regulatory included. And in order to achieve that bal- ance you have to monitor, track for new regulations and try to get as long of a lead time as possible to absorb any potential opera - tional impacts, in order to comply with whatever new requirement comes down the pike." NICOLE CASPERSON is the Associate Editor of DS News and MReport. She graduated from Texas Tech University where she received her M.A. in Mass Communications and her B.A. in Journalism. Casperson previously worked as a graduate teaching instructor at Texas Tech's College of Media and Communications. To contact Casperson, e-mail: Nicole.Casperson@TheFiveStar. com.

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