Servicers' technology choices are critical, especially as automation is increasingly tied to remaining compliant. Unless the technology is wildly out-of-date, existing products that can be put in place quickly, andtailored to meet distinct requirements, can help servicers avoid unnecessary fines.
Penalties for noncompliance in servicing are hefty and growing. The vast majority of servicers do not allocate financial resources to build entirely new systems from scratch in step with rapidly changing regulations or compliance requirements.
It's not just about making do with the tools in which they have already invested, but fully applying their capabilities, ensuring they are fulfilling specific business needs. This starts with servicers maintaining open lines of communication with their technology providers.
They should never hesitate to have an open dialogue to articulate their challenges or requests and should always inquire about what changes or additions can be made within the technology. It is important to share concerns related to internal compliance needs, as well as external requirements, in additional to general business operations.
For example, if a servicer needs a better method to identify and automatically track required information, such as whether homeowners and occupants are military service members, this is a particular compliance issue they should address.
Servicers should determine whether the technology already in place is capable of helping them fulfill these very specific tasks. Depending on a servicer’s portfolio, compliance requirements can vary significantly from one organization to the next. A servicer might have a large volume of vacant properties on its books that involve registration and additional steps and documents, for instance.
In this case, if the technology used does not already have this capability, the servicers should ask the vendor if customization is available for this process.
Since each of a technology company’s clients has various requirements, especially as it relates to compliance, servicers should be extremely detailed in explaining their pain points.
The services for which a servicer pays should align with the company's unique needs — so ask what can be done even with an off-the-shelf product. A strong technology partner will not only accept these types of calls, but will appreciate the insight and feedback.
Keith Guenther is CEO and founder of RES.NET and USRES.