The vendor has been modifying its software since April, with the bulk of the time spent on making business decisions, rather than recoding. General modifications include adding in new tests and reordering sequencing. The debt-to-income ratio, for example, has renewed importance, which is why the system now asks for income at registration. "There are a lot of new calculations. We have to do to determine whether the loan falls within the guidelines of QM," says Bechtle.
When MortgageFlex customers receive the software updates in November (within two weeks of general release and including customization rollouts), they will get access to instructional videos. "Our intent is to let customers test and lay their hands on the codes so they understand what it looks like," he says.
The updated user experience will come with some visual changes, but many updates will go undetected. "A lot of what we did is in the background," Bechtle says.
The updates are all part of a larger goal of doing away with manual processes and investing in digitally documenting loans to gain better efficiencies and accuracy.
"As a provider of technology, customers look at us as an engine to [help] enforce compliance," Bechtle says. "We are the mechanism to allow lenders to … produce high quality loans in an efficient manner. Underwriters who are pulling out calculators and yellow pads and running their numbers...it's easy to see how to make a mistake when doing it."
Still, the origination process will likely continue to be very data intensive as the rules require lenders to verify, confirm and prove borrowers can pay, which could lead to errors if keyed in manually. "Despite advances in technology, this is still a very manual process in particular when inputting data from borrower documents and transferring data from one system to another," says Jolly.
A possible silver lining: the newer regulations are pressuring lenders, servicers and their vendors on a goal they have been working on for years: paperless mortgages that offer an audit trail for examiners. The shift has required siloed systems like imaging and online applications to come under a single offering.
"It's all about record keeping," says Cornerstone's Croal. "I think the regulatory environment is forcing people away from fields and manual checklists and Excel spreadsheets."