The compliance landscape in the mortgage business is a minefield. There is The Equal Credit Opportunity Act (ECOA), Fair and Accurate Credit Transactions Act (FACTA), The Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act (TILA) and Loan Originator Compensation Rules, just to name a few. The list of compliance requirements is long. Even as you read this, The Uniform Residential Loan Application (URLA) form is undergoing modification after almost two decades of remaining unchanged. As can be expected, the changes will require additional investment in systems of record (i.e. Loan Origination Systems) that otherwise could be spend on change vs. run.
URLA is a good example of how changes can throw well-oiled process off-kilter, leading to confusion—and, more worryingly, adding to the headaches of change management and rising compliance costs. It becomes mandatory for lenders to begin using the new URLA for loan applications on or after February 1, 2020i, so a considerable amount of effort is being put into updating existing Loan Origination Systems (LOSs) and other systems that collect borrower data. Watch our webinar to understand, in detail, the key steps lenders should take to implement the new URLA
Regulations and compliance requirements in the financial sector will continue to rise in order to meet new social, customer and institutional concerns. This is especially true because of the new forms of lending on the horizon such as fractionalized mortgage shares, rising predatory practices, governmental concerns over commissions that promote disastrous employee behavior, and poor lending programs that can jeopardize entire economies. In addition, there are regulatory changes in the pipeline that could exempt small banks from certain disclosures. It’s all a bit fluid at the moment. If we were to use a single word to describe what to expect, it would be ‘uncertainty’.
Mortgage providers know that no matter what, compliance is a top down imperative and failure will result in lawsuits, penalties and reputational damage. In order to achieve high levels of compliance assurance, lenders require a digital LOS that stays automatically updated for change.
A true end-to-end digital enterprise LOS not only eliminates paper processes, improves risk assessment and underwriting decisions and shrinks loan-manufacturing cycles—it also has the ability to stay aligned with the regulatory environment. That is why regulatory change management and assurance should be one of the key features of your digital LOS strategy. Without this, the organization will always remain exposed to uncertainty and risk.
Wipro Gallagher Solutions understand the importance of regulatory change management, and focuses on keeping the businesses aligned with the regulatory environment, at every step. To know more, schedule a demo by clicking here.
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About the Author
Scott Dunn
Head of Product Management and Strategy, Compliance, Wipro Gallagher Solutions
Scott has more than 19 years of experience in banking and financial services technology and operations. In his current role, he leads the compliance strategy for Wipro Gallagher Solutions and assists clients in a consulting role to improve process, procedure and key roadmap initiatives, and meet regulatory requirements. He serves as the head of the Compliance Center of Excellence, an internal organization specializing in compliance issues associated with Dodd-Frank, RESPA, TILA, HOEPA, HPA, ECOA, FCRA and SAFE.
