Technology

Regulatory compliance remains a priority for mortgage companies large and small. And integration remains one of the best ways to reduce related risk and improve process efficiencies that result in more robust product offerings.

Internet retail lender Total Mortgage Services, Milford, Conn., said the TMS Funding wholesale division it has formally opened up to select brokers in 17 states plans to slowly and carefully expand to all but a handful of others in this country over a period of more than a year.

While other regulatory, compliance and legal issues such as the new RESPA changes have been the focal point within the primary and secondary mortgage industry over the last year, one issue flying under the radar for many lenders is privacy and data security. Financial institutions are being forced to confront a host of actual and prospective new privacy requirements as a result of new regulations adopted on the federal and state level as well as pending privacy legislation in Congress.

Integrated Asset Services LLC, a default management and residential collateral valuations company, released a new report on the state of the mortgage servicing industry. The report focused heavily on technology advances.

SureDocs, a la mode's e-signature system, has applied its 3.5 millionth e-signature.

Wolters Kluwer Financial Services has updated its Fair Lending Wiz software to include an ethnicity proxy functionality.

Origination vendor ProLender Solutions Inc. has released an FHA Connection interface.

If you ask lenders what the biggest threat to their business is, most will cite lower home values, rising interest rates, or compliance headaches. Yet in early May, Congress had to pass an amendment to the Restoring American Financial Stability Act to head off what could have been a disastrous provision for non-bank lenders. Buried in the midst of the 1,300-page act, the major financial reform bill being debated by the Senate, was a provision that would have required all lenders to retain a portion—up to 5%—of a loan’s risk in accessible capital.

In total, 80% of respondents favor manual underwriting over automating as the way to restore confidence. However, manual underwriting is fraught with error as well. In actuality both the human and the computer need to work together to restore confidence. I’m not sure the human can do it alone, but I don’t think the computer can either.