DS News - Bank of America

68 industry needs to understand that and focus on marrying mobile capabilities with the digital mortgage process. at's where we're headed. Let's look at where we are today. Most lenders and their vendors have responsive websites. Many have mobile apps for borrowers. at's great. e issue is, most mobile solutions and online accessibility options address only a single need. We need mobile technologies that function more holistically. To transition to 100-percent, fully electronic mortgages, lenders first need to realize that most homebuyers use mobile devices to conduct both personal and professional business. ere are a few technology leaders in the mortgage industry that have introduced mobile technology designed to facilitate a digital mortgage process. ese technologies not only enhance the borrower experience but also protect lenders against noncompliance, delays, unnecessary costs, and lost opportunities. Mobile apps can bring the borrower into the digital mortgage process. LOS integrations eliminate communication mishaps like errors, redundancy, and other potential compliance disasters, and apps themselves can fulfill several functions—from communicating, satisfying loan conditions, and uploading/ sharing documents to electronically delivering and eSigning disclosures. In the end, the future of mortgage lending isn't about jumping from application to application, but rather, using as few applications as possible to get a more seamless, connected, and secure experience. It's exciting to see the progress that we're making and the advances that are on the horizon. anks to the progress the industry's leading technologists have made together, more borrowers can enjoy the benefits of electronic mortgages, like simplicity, speed, security, and an enhanced loan experience, while lenders gain a competitive edge and improve their bottom lines. Dominic Iannitti is President and CEO of DocMagic, Inc., which offers fully compliant loan document preparation, compliance, and eSign and eDelivery solutions for mortgage lenders. Iannitti founded the company in 1988. How to Handle the Upward Trending Default Rate After Years of Declines By Cindy Walton, ISGN Corporation Home equity, ARMs, or step-rate modifications all have a higher risk of default when interest rates rise. With the Federal Reserve raising their rates twice over the last six months and the trending increase in mortgage defaults, it is important to evaluate how to handle the influx of defaulted loans after the past decade of downward staffing. Even the slight increase, as seen over the past few months, about 1 basis point per month (according to S&P/Experian First Mortgage Default Index), can affect the workload required of each default servicing representative. Additionally, if servicers use different systems to manage first and second mortgages, the increase in second mortgage defaults will bring about additional risk and increased need for oversight on liquidation practices to hedge the risk of financial loss. Since servicers today are staffed at a minimum to cut down on cost, a slight increase in default would add to the current workload and could be detrimental to the servicer and increase the required oversight that is needed to handle defaulted loans. is concern can be addressed with technology. e slight increase doesn't necessarily justify the cost of adding additional staff but can be managed with an effective default management solution. According to Margaret Dewar's '2013 Emery Law Journal Entry "Regulation X: A New Direction for the Regulation of Mortgage Servicers'," the mortgage loan origination practices in the early 2000s were the beginning of what the mortgage industry refers to as the financial crisis of 2007. Poor servicing practices and procedures led to unnecessary foreclosures and a heightened financial burden on servicers, investors, and borrowers alike. While there have always been federal, state, and other guidelines that a servicer had to follow, there are now regulatory guidelines, mortgage insurer guidelines, and government entity guidelines. All these regulations have been put into place to control the lack of oversight and poor practices. e adaption of the new requirements are burdensome on the servicers and can be costly due to procedural inefficiencies and lack of technology features. On top of having to deal with laws and regulations, servicers are also responsible for the multiple aspects of the actual default process. For example, a borrower could be trying to short sell their property, plus one or more of those borrowers could have filed bankruptcy, and the loan could be at a threshold of too many days delinquent which means that the servicer could have been moving forward with a foreclosure filing. Anything that occurs (or sometimes does not occur) on a mortgage or property will cause the servicer to have to deviate from a "normal" default process. is branching of the processes off into many different directions can mean multiple types of handoffs. With each handoff, there is a risk of incorrect processing, untimely turnaround, or quality of data issues. Everchanging regulations can lead to unwanted and unnecessary costs. A complete servicing system platform which includes default management can manage the unpredictable paths a defaulted loan can take as well as track first and second mortgages within one system, among other efficiencies. It can also mitigate the risk of adding extra burden onto your existing staff, or help avoid having to hire and train additional staff just to manage the increased volume. A servicing/default platform that can service both first and second mortgages will not only allow a servicer to become more efficient but it will also allow for increase quality of servicing on a defaulted loan and help avoid potential write-off scenarios. Cindy Walton is ISGN's Vice President of Client Relations. She manages major customer account re- lationships for ISGN, provider of core and complete

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