Effectively managing the process of implementing new policies creates a more efficient process that will help keep mortgage companies from running afoul of regulators and improve operations, panelists said Wednesday during the Mortgage Bankers Association's National Servicing Conference in Dallas.
Organizations need to implement a change management office to help guide new initiatives and efforts.
"You're basically putting a discipline and governance around making changes," said Cheryl Johnson, senior vice president and director of origination solutions at Lender Processing Services.
She went on to explain that the change management office is responsible for developing ideas for new methods of doing things (both internally and by soliciting feedback from other departments) and then researching and justifying potential proposals. Then, the organization's project management office develops the change, tests and trains it and ultimately implements the new process. Together, the two groups measure the change to ensure it accomplishes what it's supposed to.
It's important to be mindful that many times, employees who are impacted by a change will likely resist it, even if it ultimately makes their jobs easier.
"You're asking people to make a change in their daily routines. We're creatures of habit and we want things to be better, as long as they stay the same," said Greg Botto, senior vice president of Quattro Mortgage Solutions. "But you can't live behind that oxymoron."
In the case of Union Bank's recent conversion off a proprietary, 20-year-old servicing system to a new vendor-managed platform, managers were given talking points to address both the pros and cons of the implementation, said Stephanie Rolewicz, the bank's senior vice president and group technology manager.
"When you go to make a big system change and move off of legacy systems, there are a lot of growing pains...it was a very big learning curve for the group," she said, adding, "You want your managers to be the biggest drivers of the change."
In addition to internal adoption with employees, organizations have to consider the impact of their operations on consumers.
"One thing we've learned from the CFPB is that the consumer has a voice in the industry," said Garth Graham, a director at Stratmor Group.
Graham said the process improvements that have the biggest impact on consumers may not have the biggest impact on lenders and servicers. For example, the appraiser is one of the few people a consumer may actually see face-to-face in a refinance transaction and is crucial to ensuring customer satisfaction.
"The appraisal process has as big of an impact on customer satisfaction as anything else that happens in the origination process," Graham said.
The Consumer Financial Protection Bureau and other regulators want to see that change management is handled effectively at mortgage companies, said Chris Christensen, an attorney at the PeirsonPatterson law firm. When companies undergo regulator reviews, they emphasize organizations' ability to adapt to new policies.
"Your policies and procedures will be front and center and that means you can't just copy and paste the regulations into your handbook," Christensen said.
In the examinations that have already happened, regulators have cited mortgage companies for their lack of a sound change management infrastructure.
"A common theme in regulatory enforcement findings is a deficiency in ensuring that policies and procedures are updated on an ongoing basis as necessary to incorporate new or changes to legal requirements," he said.