Costs cloud some lenders' view on the success of data initiatives

While the majority of lenders feel mortgage industry data initiatives have been valuable, their cost is clouding some originators' viewpoint, a Fannie Mae survey found.

While data standardization efforts have led to fewer data corrections and loan delivery issues, "adapting to these standards can be costly and time-consuming," said a blog posting from Lisa Dorsey, Fannie Mae's director of digital products. "The cost and time investment will have a larger impact on institutions with limited resources and create higher barriers for new entrants into the mortgage market."

In general, 46% of the respondents felt the data initiatives were only somewhat valuable for the mortgage industry, while 28% said they were very valuable, 22% said they were not very valuable and 4% said they were not valuable at all. Nearly one-third of the smaller lenders (those with under $248.3 million in 2016 volume) felt the initiatives were not very valuable or not valuable at all.

Just fewer than 60% of the respondents felt that the mortgage industry was only somewhat prepared to prevent data breaches and cyberattacks, while only 9% said participants were very prepared.

Furthermore, one-quarter of those surveyed said the industry was not very prepared and 4% said it was not prepared at all.

The findings came from Fannie Mae's fourth-quarter Mortgage Lender Sentiment Survey, which had 196 participants. There were 74 non-depository mortgage banks, 77 depositories (excluding credit unions) and 37 credit unions.

When it comes to managing data, 61% said the mortgage industry is doing it somewhat well, with 10% saying it does it very well and 28% declaring it does not do it well at all.

But 33% of the non-depositories and 29% of the depositories responded the mortgage industry is not doing a very good job at managing data.

Still, 41% of all respondents had enhancing data accuracy and consistency of mortgage transactions as their first or second choice of the benefits of mortgage industry data initiatives. But improving data security was cited by just 11%, behind enhancing the borrower experience, reducing repurchase risk, reducing cycle time, reducing compliance costs and informing business strategies.

When it came to challenges for data initiatives, 41% had updating their information technology systems as the first or second choice. Ensuring data quality and accuracy was named by 30% of the respondents, tied for third on the list, while ensuring data security was cited by 16%, seventh on the list.

When asked about the most needed resources that would help with data initiatives, 39% had more support from their vendors as the first or second choice, while an equal number had more time to implement data standards. Dedicated IT resources were next at 33%; followed by training, 21%; additional funding, 28%; and resources to find the right talent or vendors at 22%.

"Most importantly, the success of these data efforts requires all industry participants' collaboration. Data standardization alone is not enough. Major challenges lenders cite point to the lack of integration across systems and players," Dorsey said.