Regardless of changes in the markets, customer demographics, the economy, rules and regulations, one thing seems to stay constant, everyone wants quality.
Quality in services, quality in products, quality in relationships and a satisfactory quality of life. Why would it be any different in mortgage lending? It isn’t (Quality)! Borrowers want quality, as do the entities buying and insuring your loans. It is also one of the major expectations of the Millennial generation.
People are willing and prepared to pay for quality both in service and product. How many times will you spend a little more to buy something of greater quality, or spend a few more dollars to use a particular service provider because of the quality of their workmanship? Although everyone is looking for a bargain, a product, or service of poor quality is just a waste of money. Quality is worth the price in the long run.
For lenders, much emphasis has been placed lately on the rising cost of compliance. In lending, compliance and quality go hand in hand. This cost is partly the result of the poor quality of loans made during the period prior to the housing crash. These loans, coupled with the crash, led to major losses for lenders, the Agencies, Wall Street and consumers. Everybody lost because of poor quality, both in product and documentation. So, somebody decided there should be a law. We all know what happened; Dodd-Frank and CFPB.
However, things are not all that bad. If lenders invest wisely in systems and automation to help them meet the compliance requirements they will also create the potential to produce a better quality product. By producing a better quality product, they will not only better satisfy their customers but also the purchasers of their product, and ensure better performance. As we know a better quality product, provided with quality service, can bring a better price. A smart investment in compliance will pay dividends in quality and will result in better profits.
It’s the increased costs of non-compliance that you should be worrying about …