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   ARTICLE   |   From Scotsman Guide Residential Edition   |   March 2011

4 Tips for Choosing a Tech Vendor

A technology provider can save you time and trouble, but finding the right one isn’t easy

For many mortgage brokers, the thought of assimilating the latest industry regulations into their business brings one word to mind: overwhelming. The Secure and Fair Enforcement for Mortgage Licensing Act, Regulation Z amendments, Home Mortgage Disclosure Act reform, Real Estate Settlement Procedures Act requirements, and the Mortgage Disclosure Improvement Act present a slew of challenges.

Toss in market shifts, regional rules, and the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the complexities of operating in today’s mortgage industry can be almost impossible to handle.

By partnering with a technology vendor that reacts appropriately to changing legislation and adjusts to demands for improved data quality, brokers can get back to the basics of closing loans and increasing their originations. Moreover, the right vendor can help you originate marketable loans with fewer overhead expenses.

The following four tips can help you choose a great technology vendor.

  1. Seek a vendor that offers improvements through automation. Although automation may seem to have reached mainstream adoption, many brokers continue to use manual systems and processes. Because of this, they must check and recheck information that could be verified automatically.
  2. By investing in an automated system, you can manage legislative and data-control activities as part of an overall risk-management program. Automated systems reduce the number of human touches and the expensive mistakes those touches sometimes cause. Automated processes also deliver accountability, transparency and ethical consistency.
  3. Confirm the vendor’s commitment to understanding regulatory changes. Great vendors actively ensure that regulatory and other changes are fully integrated into their systems. In this lackluster mortgage market, vendors with deep pockets and long-term vision can be hard to find. Brokers, however, must strive to identify the best support for tackling the compliance burden.
  4. Enter the selection process with objectives and ask for proof. Know what your business needs and what a vendor must provide to meet those demands. In addition, don’t take a vendor at its word. Review product demonstrations before purchasing any technology. Vendors should tout their compliance capabilities and prove them upfront.
  5. Reviewing the vendor’s implementation process and audited financial statements also can be wise. Most important, the vendor should have its own compliance staff that can be relied upon without doubt.
  6. Ensure your current systems speak the same language. Make sure that the systems offered by any vendor you choose work well with your existing technologies. Each platform’s architecture should bundle and integrate seamlessly to meet your customers’ demands. For example, your loan-origination system should communicate easily with your document-preparation system.

Seamless integration avoids wasteful manual consolidations that can require constant back and forth between systems. It also helps you protect your original technology investment, enhance its use and comply with today’s changing market.

Mortgage brokers who conduct thorough research before choosing a technology vendor will gain the greatest protection against today’s compliance burden and deliver the best improvements to their bottom line.


 


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