In 2011, technology tools were crucial for lenders and servicers to adapt to changing compliance demands, new trends in origination and servicing, as well as in the valuations and default arenas. And many industry players are expecting more of the same in 2012.
It's been two years since the amended Real Estate Settlement Procedures Act took effect, but lenders are still working to find the best strategies and technology to meet those compliance requirements. Paul Mass, president of ClosingCorp, a provider of RESPA-related technology, believes lenders will continue to gravitate toward Web-based technology.
“Mortgage lenders will continue to recognize that automated, Web-based solutions for many of their origination and regulatory compliance tasks and responsibilities are necessary and desirable,” Mass told NMN.
Mass adds that compliance isn't just for the sake of meeting regulatory requirements. Lenders and the title and settlement industries will continue to recognize that transparency and accuracy is important to their customers, too.
“This leads to a customer that will feel they are being served well and getting value,” he said. “This is particularly important for products, such as mortgage loans and title insurance policies, which otherwise are easily characterized as commodities, distinguished only by price.”
Some origination technology providers are expecting an increase in mortgage lending to come from community banks and credit unions, which means more opportunities to sell products like loan origination systems.
“We anticipate that midsize institutions, from community banks and credit unions to mortgage lenders, will continue to pick up market share,” said Keven Smith, CEO of LOS vendor Mortgage Builder Software. “Cumulatively, they will be a major market force as they continue to fill in the gaps that have been left by larger players either exiting or scaling back their operations.”
Smith added that the wholesale market began to re-emerge in 2011, and he expects more expansion of that channel in 2012.
In addition to more small lenders playing a larger role in originations, Kevin Stitt, president, Gateway Mortgage Group, believes that sector of the industry will also take on more performing loan servicing. “With Basel III limiting the amount of mortgage servicing rights a depository institution can hold on its balance sheets, many of these organizations are no longer taking on more servicing portfolios.” he said.
