Compliance Is Key, but There Are Other Lessons to Learn

New rules are important but there are other skills to learn, too. Image: Fotolia.

While training with the aim of compliance is no doubt hot, there are other compelling reasons to train as well, including the value it can provide in staffing and loan sales, said Alice Alvey, senior vice president, Indecomm-Mortgage U.

“Everybody seems to be zeroed in definitely on compliance,” she told this publication, but added that her company also has found demand in the two other areas.

The three goals do not have to be mutually exclusive, according to Annamaria Allen, founder and president of The Compliance Group. Although some have jokingly referred to compliance as the “loan prevention department,” she said, “It doesn’t have to be looked at in that light.”

No loan would be made if noncompliance caused a regulatory shutdown, so it more enables lending than prevents it, and there are things one can do to accommodate more streamlined training, said Allen, whose has more than a decade of operations experience.

“I think there are ways to have it work so you can have the best of both worlds,” she said, noting that one can, for example, make training more efficient by using automation that has a “milestone” into the process, not letting a loan proceed until a compliance requirement is met.

Other efficiencies may be worth training originators and other parties involved in the loan process to avoid unnecessary duplications of disclosure and other information, said Barb Bechtold, compliance manager at The Compliance Group.

While some technology has built-in features that can be used to avoid rekeying through data-mapping and even electronic indexing of documents, these tend to be underutilized, she said.

Besides using efficient compliance training to help address market change as rates have risen, originators have been starting to focus on other specialized products that have some potential to add to loan volume, such as VA or FHA, Alvey said.

Needs for more specialized products like rural housing loans tend to be less common or more narrowly employed in situation where, for example, the loans are popular in a particular geographic market.

But some like Atare Agbamu, president and CEO of consultancy ThinkReverse LLC, argue that this is among the reasons why getting training in a more selectively and rarely used product like a Home Equity Conversion Mortgage may be a competitive edge.

“The easy fruit are gone,” when it comes to originations, he said.

While reverse mortgages often requiring years of consideration on the borrower’s part, and generally are used to date by a small percentage of qualified borrowers, making just one the right way can boost borrower relationships immeasurably, said Agbamu.

“If you do what is in the best interest of the borrower you will take care of yourself,” he said.

Agbamu, who has an academic background, said he has studied aging issues relevant to reverse mortgage and has information that could be used as an originator training curriculum that shows how these fit in with making reverse mortgage lending decisions.

Originators do not want to deal with aging issues, “they say it’s invasive,” he said, but with reverse mortgage reform underway Agbamu believes his thinking “will become the new normal” and those who tap into it now may have an edge.

Required counseling protocols do touch on key aging issue questions and borrowers also must be directed by originators to consult a trusted advisor, which could be a financial planner, but originators should be well-versed in this area, too, he said, noting that the required counseling is a one-time event.

Agbamu said reverse mortgage originators do not necessarily need to have the same expertise as, say, an aging specialist, but they should have enough knowledge of aging issues and resources to refer borrowers to appropriate experts.

When asked if there is any training need she feels is being neglected, Alvey said she could not name a specific instance, but noted that she believes the interest in training in all areas on both the origination and servicing side of the business tends to be too reactionary.

A company’s executives may, for example, suddenly realize they don’t have enough processors, try to hire experienced processors, realize they can’t and then turn to training, Alvey said.

“You need to look at training as something you always have in place” and have some form of corporate training, she suggested, noting that the mortgage industry is “way behind other industries in that area.”

While buying packages of courses may be attractive she feels “they all need a certain amount of customization.”

She cited an example a bank course on anti-money laundering that only had one slide dedicated to what is relevant to a loan processor.

Companies worry about the cost of proactive training, but it can save them money in the long run, Alvey said.

“There is so much cost saving in areas like staff retention,” she said, noting that training can be used to help groom staff to replace positions as they become open.

“As the market’s changing, now is the time to plan for that,” Alvey said.

Training can be helpful on the servicing side of the business as well as the origination side, she said, noting that she still finds need for more training and staff in the default management area.

“Customers are still not getting the attention they need,” Alvey said.

Although live training is the most effective in terms of absorption of knowledge, due to cost and location considerations there has been more of a trend toward interactive video training that tracks comprehension, she said, noting that there are various pricing options for different types of training.

Allen said often a company uses training with a live instructor at the outlook when a company first hires, and there on a more periodic basis as updates are needed.

Alvey said the video component has generally done best in interactive training because “most people are visual learners” and this is best used in conjunction with a “learning management system” that allows there to be tracking of “who has taken what.” Some webinars do not do this, she said.

She recommended that the wider context around training be considered in whether or how to use it to reach business goals. In staffing, for example, there are prehiring assessments that are done separately. When it comes to secondary market aims like making a move to sell direct to Ginnie Mae assistance is generally done through more of a consulting arrangement. A training company may be able to help with these referrals, she said.