A recent MBA NewsLink article (The Article) outlined new MBA Chairman-Elect, Bill Cosgrove’s, CMB, comments about the importance of the new regulatory requirements.
According to Cosgrove, regulatory compliance is one of the largest contributors to his company’s success. What a turn around. When the new rules were first introduced many industry insiders said they would be death knell of the industry. But, by providing lenders with a blueprint to help them manufacture a better quality product, lenders, who learned to originate in compliance with the new rules, found they had less problem loans, fewer defects, a better performing product and happier customers.
Cosgrove stated, “…today your regulatory compliance is integrated into the sales process; it’s critical throughout the whole process of mortgage banking, which is a 180 degree change from just a decade ago.” Oh how true. If you have not integrated the quality checks and systems necessary to monitor your loans throughout their life cycle, from application through servicing, you may find it difficult to compete with lenders who have done so, while seeing your cost to produce loans increasing, and profits declining.
It’s still true; an ounce of prevention is worth a pound of cure. The proper investment in quality and compliance can pay big dividends when used properly, but you need the systems to detect and correct errors early and often throughout your loan’s origination process. Get on board and embrace change and the required regulatory compliance and you’ll find originating and selling loans will get a lot easier and more profitable.