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I’ve enjoyed writing the “Hey Boomer” blog series on b-Logics this year, which looked back at the way loan quality control (QC) was once managed in the mortgage industry and how its evolved. For my last post of the series, this will be the fifth and final, I’m diving back into defects.
Recent industry volume got me thinking about the importance of efficient, real-time communication to stay on top of loan quality. Secure web portals, like LoanLogics Audit Response Center (ARC), play a big role in that. In a prior post, we discussed how ARC helps QC managers easily track and report on the rebuttal process in detail. Beyond that, these secure portals can route conditions to a designated responsible party and/or Multiple Areas of Responsibilities (AORs) as they’re discovered. When I think about it, portals are to defect management what modern day telecom was to the telephone switchboard, a much better way to facilitate efficient communication.
The switchboard, certainly novel in its hay day, was meant to replace the telegraph which sent long distance textual messages, usually made up of symbolic codes. It was a vast improvement and more direct then dealing with code that was rather cumbersome to decipher. The switchboard, however, still put a human being in the middle of connecting two parties. As telephone companies added new customers, the number of operator jobs continued to grow. The cost of human labor to manage rising demand for communications began to be an expensive bottle neck. That sounds a lot like QC managers using email and spreadsheets for defect management and communication in a high volume environment, still quite prevalent in the industry today. Days can be added to the QC process trying to get to the right person, getting their response, matching it to the correct loan file and manually clearing the conditions.
Enter modern telecom that used more sophisticated technology to seamlessly connect one telephone user to another, anywhere in the world, directly and instantaneously, a significant improvement for communications. LoanLogics’ ARC, offered in our loan quality management platform LoanHD®, does the same for defect communication. When a defect is found, a direct communication exchange takes place between QC teams and the responsible parties, most commonly production teams. Done in real-time and fully automated, the ARC tool provides all parties direct access to the condition detail, the related documentation and a way to rebut and clear issues right in a single system interface.
As we all know, telephone switchboards required operators to make the connections. (Laughing) Do you remember Lily Tomlin’s character, Ernestine, the phone operator? I loved that character. Anyone born in my generation would. But, while we may have loved to hear the voice of the telephone operator every time we made a call, our desire for immediate connections, which ultimately led to text messaging, etc.…, was too strong of a need. ARC replaces manual practices with immediate connections, hence the name AUTOMATED Response Center. It allows you to designate a person or persons to receive the notifications related to particular defect categories. The benefit of this preconfigured hierarchy is that defects get to the right person for rebuttal and their response can be easily captured with the associated loan file, minimizing the amount of time needed to clear conditions and letting underwriters, processers, and the like get back to what they need to do for the business – close loans, something everyone is feverishly doing these days.
Like watching the history of the telecom industry go from the telegraph, to switchboard to now instant communications and Facetime from anywhere at any time, it’s been really cool to watch how QC has evolved in our Industry over the last 25 years. Secure web portals, machine learning technology and automated rules-driven workflows are making loan quality more efficient and trusted than I ever thought possible. Amazing! I can’t wait to see what’s next. You can bet that LoanLogics will be on the leading edge of that innovation.
Be sure to check out my post from last November which covered the reports QC managers should be thankful for that make their day job easier!
