For midsized lenders who have closing times averaging around 21-28 days in length, those closing times could double when the new rules hit, warns Scott Stucky, chief operating officer of DocuTech, who advises lenders to address this by preparing as much ahead of time as possible for it.
“I think the spigot’s going to shut off,” he said.
Stucky, whose company is working to handle the mortgage documents as efficiently as possible and offers transactional pricing so costs adjust as volumes do, is suggesting lenders mitigate the concern by planning ahead to the extent possible, with a focus on efficiency.
He said he is finding some loan origination system providers are ready for the January compliance deadline operations but there is some variation in that. He anticipates some key LOS providers in the midtier will have supporting technology rolled out by mid-October, which should give lenders in that size range enough time to gear up.
However, larger lenders in the top 25 due to their large scale should be ready now, or they may have some catching up to do, he said.
Stucky said some opportunistic call center operations, which are generally supported by self-licensed originators and have relatively low operational costs and fast launches, may drop out in and out of the business as volumes fluctuate.