20 Mar Paradigm Shift in Mortgage Technology Solutions
The mortgage industry continues to be front and center. Congress and the current administration have made regulatory compliance and enforcement a top priority. There are constantly changing rules and risks from the FTC, Federal Reserve and HUD which is focused on flexing their authority over marketing, origination and servicing.
Lenders are overwhelmed with the challenge of the massive Truth in Lending changes. Lenders must adapt and modify their processes to accommodate new TILA rules under the Mortgage Disclosure Improvement Act, Real Estate Settlement Procedures Act and TILA/ Home Ownership Equity Protection Act impacting disclosure requirements.
Adding to the pressure for lenders is the need to effectively address loss mitigation, loan modifications, REO’s, defaults, foreclosures, short sales, accurate appraisals and valuation. In this lending environment many lenders are focused on just keeping their head above water. When this happens often technology is viewed as just one more obstacle and hindrance to accomplishing the task at hand.
Lenders remember the days of lengthy and resource intensive implementations, the need for extensive training, overall user resistance to change and the need to purchase costly hardware upgrades. Unfortunately, at a time when technology can help alleviate much of this burden, lenders are often making the choice to hunker down and do nothing.
Today’s technology includes advanced web-based solutions, software as a service SaaS models, cloud computing and an overall shift by vendors to more of a service provider mentality.
“Software as a service (SaaS, typically pronounced ‘sass’) is a model of software deployment over the internet. With SaaS, a provider licenses an application to customers for use as a service on demand, either through a time subscription or a “pay-as-you-go” model. Also known as “software on demand,” the SaaS model allows vendors to develop, host and operate software for customer use. Rather than purchase the hardware and software to run an application, customers need only a computer or a server to download the application and internet access to run the software. The software can be licensed for a single user or for a group of users”. 
“Cloud computing is Internet-based computing, whereby shared resources, software and information are provided to computers and other devices on-demand, like a public utility.
It is a paradigm shift following the mainframe and client-server shifts that preceded it. Details are abstracted from the users who no longer have need of, expertise, or control over the technology infrastructure “in the cloud” that supports them. Cloud computing describes a new supplement, consumption and delivery model for IT services based on the Internet, and it typically involves the provision of dynamically scalable and often virtualized resources as a service over the Internet. It is a byproduct and consequence of the ease-of-access to remote computing sites provided by the Internet.” 
These solutions often require little to no change in hardware requirements, can be installed quickly and deliver the service providers specific knowledge and expertise to handle distinct aspects of today’s current market conditions.
Lenders need to embrace this paradigm shift, and understand that technology can act as a great enabler allowing them to more effectively respond to today’s mortgage conditions.
Service providers can efficiently deliver a host of solutions that address compliance, fraud, loss mitigation, short sales, compliant documents, electronic delivery of disclosures, and marketing automation to name just a few.
Share with us your thoughts on this paradigm shift. Do you agree that technology can act as a great enabler to address today’s mortgage market? Do these solutions reduce the burden on lenders? What other technologies are enabling lenders to effectively respond to the current conditions?
 ^ SaaS—Software As A Service. Retrieved 2010-03-05.  ^ Distinguishing Cloud Computing from Utility Computing, ^ Gartner Says Cloud Computing Will Be As Influential As E-business