Mortgage banking executives are expert at setting mortgage compliance strategy, yet they face significant compliance risk.

The problem is that originators face severe challenges in operationalizing the balanced compliance strategies they have developed. If financial services organizations target to operate more profitably—while fully compliant within regulatory and investor guidelines and achieving higher levels of customer satisfaction—this is the problem that must be solved.

What we found

A regulatory compliance failure is often viewed as a fundamental misunderstanding of the requirements, causing banks to reformulate strategy.

An investor compliance failure has been viewed as an attempt by investors to pass back risk, which leads banks to reformulate strategy.

Mortgage banks are caught in an endless cycle of rewriting compliance strategy to deal with compliance problems.

Quality assurance, while essential, deals with problems after they have occurred and does little to guard against future problems.

The problem banks must solve is not strategic—it’s tactical. It's not about strategy; it's about execution.

Outsourcing to experts who will take on compliance risk is attractive, but piecemeal outsourcing increases costs and risk instead of reducing them.

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The solution will involve business process outsourcing—but not the piecemeal outsourcing of the past. Originators must find partners that can guarantee the perfect operationalization of their unique mortgage compliance strategies.

What we recommend

  1. Outsource the entire process
    Stop piecemeal BPO and find a partner who can take over the entire process of loan origination from end to end.
  2. Focus on the people
    Find a partner that has expert personnel in every department to guarantee compliance throughout the origination lifecycle.
  3. Focus on the process
    Find a partner with proven processes guiding their work, setting standards for its completion and checking for compliance problems in real time.
  4. Focus on the technology
    Find a partner dedicated to employing the best industry technology, with good training and a plan for keeping technology updated.
  5. Focus on the guarantee
    Find a partner that can guarantee they will operationalize the bank’s mortgage compliance strategy—and that has the balance sheet to back it up.
The problem banks must solve is not strategic—it’s tactical. It’s not about strategy; it’s about execution.
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