Technology is extremely complex today and the compliance requirements are so high that more and more providers are offering pre-configured software to avoid customizing code. There are good reasons to avoid a custom implementation when possible, but there are also reasons that software providers must remain flexible if they hope to meet the changing needs of today’s mortgage lenders.
Why a flexible provider is essential
Adjustments a lender makes will affect the way they interact with their borrowers, which means that it will impact the documents the lender produces. When changes are required, the lender will often need the assistance of its document vendor.
Vendors that do not have the capacity to be flexible are not likely to provide the level of service required by the lender, resulting in customer service failures, delays or non-compliance problems. Over the many years we’ve been in this business, we have seen three of these drivers impact our clients over and over again.
Over the past decade, the most common cause for revisions for most lenders are changing rules, either handed down by investors or by regulators. The need to remain in compliance at all times requires the lender to take swift action when rules are modified. This often requires the support of a flexible document provider.
Failure to provide adequate resources to the lender because the document provider is not flexible enough to shift its own priorities is a recipe for disaster and a sure sign that the lender has chosen a poor partner.
As mortgage interest rates rise this year, competition will heat up and lenders are likely to be driven into new products as they expand their menus to attract new business. When they do, they’ll need to add new doc sets and possibly disclosures to ensure compliance.
Again, these changes are likely to occur quickly as management moves to head off the competition and gain footholds in new markets. Their document providers will need to move quickly, too.
Strategic driven changes
Management’s ability to make good decisions depends upon the options available to them. As the markets shifts, management will make adjustments to their operations, whether or not they feel competitors are driving them to do so. Often, these modifications are the result of changing management priorities.
Flexibility on the part of any partner is difficult to define. However, inflexibility is easy to see. Lenders will get promises from every prospective vendor, but only by performing significant due diligence can they uncover the vendor’s actual abilities.
Given that any variation a lender makes in its approach to the business will necessitate a change in the loan documentation, it makes sense to seek out and partner with only the most flexible document vendor.