Data Facts Lending Solutions Blog

How To Lower Your Compliance Costs

by Jennifer Hamby

Apr 9, 2015 2:51:09 PM


According to Fannie Mae’s October 2014 Third Quarter Mortgage Lender Sentiment Survey* of senior mortgage officials, 72% of respondents said they paid more for compliance in 2014 than they did in 2013. The median increase in compliance spending was 29%. And with TRID and other pending regulations, those compliance costs are expected to increase even more in 2015. 

With costs up for the majority of lenders, and greater partnering with vendors, the goal, then, is to figure out how to meet compliance requirements in the most cost-effective, least labor-intensive manner possible. The answer….TECHNOLOGY

Technology is changing the mortgage industry. Employment, income, deposits, assets, tax return info, and more can now be instantly verified using the latest electronic verification technology. Undisclosed debt can even be monitored in real-time throughout the quiet period.

Lenders are finding that using third-party vendors that offer advanced technology and larger staffs can provide economies of scale that result in verifications being completed faster and at less cost than if the lenders did the work themselves. In fact, many lenders have discovered that the technology offered by third-party vendors not only takes tedious verification work off their desks, but they get answers so quickly and the data is so reliable, they are able to make better-informed lending decisions.

New regulations recommend that lenders thoroughly vet, monitor and manage each third-party vendor they use throughout the loan process. Unfortunately, this can be expensive, and more importantly time consuming. Because regulatory guidelines for vetting third-party verification providers run the gamut from “very specific” to “somewhat vague,” many lenders are unsure of the level of due diligence they should undertake when scrutinizing each new vendor. 

In this day and age, lenders need to take an extremely thorough approach to be safe –time and money quickly add up when you must vet multiple third-party companies. Then, once all the evaluations are complete and you’ve entered into relationships with various vendors, you must continue to monitor the process at each vendor to manage risk and ensure all are regularly updating procedures to remain in compliance. Whew!  Exhausting, right?  Well it doesn’t have to be. 

Fortunately, a new product BDV-Background Data Verification offers a comprehensive solution for Third Party Vendor Management. This solution will help you maintain compliance in an efficient and cost-effective way. This all in one solution allows you to pre-screen, monitor, and then manage all third party individual and companies associated with your loan process for complete compliance with CFPB, OCC, FDIC and investors. 

Join us on April 2st, 2015 1:00 PM CDT to see how this solution can save you time and money!  REGISTER TODAY 

By working together and using technology to quickly complete tasks that used to be labor-intensive, we can ensure new regulations do what they’re supposed to – protect consumers and lenders from mortgage defaults – without breaking the bank. Now, that’s a good thing!

Topics: Mortgage compliance

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