There's no compliance without technology.

Author:Blaszyk, Cathy
Position:Executive Essay

Compliance has been a top concern for lenders and a resounding theme in 2012, and it will continue to challenge mortgage companies in 2013. Compliance is by far the most widely discussed, advised-upon and accommodated-for issue lenders face today.

As a whole, companies have not taken full advantage of new technologies designed to help them keep up with industry changes. With a constant focus on serving customers and managing today's refinance volume, lenders are operating with an "all hands on deck" approach that leaves little room for technology initiatives or investments.

However, leading lenders are gradually making the move to adopt more robust systems--primarily loan origination system (LOS) software and workflow products--that enable them to keep up with the rate of new legislation and prepare for the future.

Lenders are increasingly aware that the Internet enables consumers to become more knowledgeable before they enter the home-buying process. They come to lenders having already researched options and are prepared to drive the course of their purchase.

To conduct business with today's tech-savvy and mobile-connected consumers, lenders need to adopt technological practices that help them uphold compliance while providing the level of service consumers expect.

LOS: The crucial first step

The majority of lenders remain focused, and rightfully so, on the areas of their business that bring in revenue. However, maintaining profitability and compliance requires them to devote the time and resources to better technology--beginning with an LOS they can rely on well into the future.

Too many lenders are operating on antiquated LOS platforms that simply no longer meet their expanding needs, especially with government oversight growing. An LOS can no longer serve as just a system of record; it is now the provider's duty to deliver a product configurable to meet every lender's unique business, perform a wide variety of services and, above all else, help them remain compliant.

Lenders must be able to manage everything from the LOS. Establishing automated workflow to route tasks and documents will ensure timeliness at every step of the process. With the increasing amount of work involved in closing each loan and the requirements for greater data retention, the proper use of workflow technology prevents items from falling through the cracks and reduces the number of human touches to each file.

Loan origination systems should allow lenders to order...

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