The “Cyber-mortgage”

You can’t turn on the radio or TV these days without hearing the advertisements for “the first totally online mortgage” or websites that help you troll the listings online to find your new home.  At the same time, you can’t turn around without hearing about hostile nations hacking into all sorts of sensitive government systems & stealing the fingerprints and personal information of millions of people.

I know I’m dating myself here, but remember that old movie Terminator 2:  Judgment Day?  There’s a scene where the original Terminator (Arnold) is trying to save Linda Hamilton from the liquid metal Terminator that just took out all the employees at the mental hospital.  Arnold says, “Come with me if you want to live”.  Her response is priceless, of course because all she remembers is how he tried to kill her a million different ways in the first movie.  Well, every time I hear someone saying how great the cyber-mortgage & eclosings are, my face does this thing that mimics her reaction to the idea of going with the Terminator.  She obviously missed the memo of how the machine sent to kill her has turned into her white knight.  I know how she feels.

It seems like there is a pink elephant in the room with all the “hip, hip, hooray” about everything going online – including home buying process that has previously been compared to a spinal tab due to the amount of information we have to pony up.  I’m all for improving service to the client and making processes easier for everyone involved, but are we really ready for this?  I can’t help but wonder, with all the cyber attacks that businesses face and all the data breaches at the highest level of our government, who is this online mortgage really benefitting?

Age-wise, I fall right between the baby-boomers and the millennials.  So I grew up with color TV, but a cell phone was the size of a briefcase when I was a kid, and “gaming” was family Monopoly night, since the Atari had just hit the scene.   So I understand how technology can benefit us all, but I can’t help but wonder if we are putting the chicken before the egg.  Are we doing enough to protect people from all the cyber-threats out there?  If the Pentagon can get hacked, it is reasonable to expect that the personal information I shared to get my loan won’t make it into the hands of some terrorist or a teenager that wants to hack into my Netflix account?  I don’t think so.

Plus, what about all the questions I may have about the process?  Is it “fair lending” to push people of my parent’s generation into using an online process they don’t understand?  We keep programming everyone to think paperless is good and everything online is best, and the mysterious cloud that nobody understands is the future of everything.  Not too long ago, the entire financial system was on life support because of these loan products that borrowers were sold, which they never understood.  I haven’t heard anyone address fairness in the process by which all information is obtained.  In my view, that’s a bigger deal.  A mortgage loan affects one aspect of your life, but the data that makes up your entire identity has tentacles into every single aspect of who you are, how you spend money, your reputation, your job and every person with whom you associate.

I suspect that the push to the online, cloud, eclosing platforms is for the benefit of the lender, bank, investor and government entity.  If they can close more loans, they can make more money.  If they can grab all of your information quicker and validate it electronically, that saves time, which saves money.  If the government agencies can get to the lender’s electronic reporting data quicker, they can perform audits faster and collect more fines and penalties.  Efficiency has a big financial payoff in the long run.  I understand this from a business standpoint.  I just can’t help but wonder where it’s ok to lose the human touch without paying a price.  Aside from all the scams & cyber-threats, where does the lack of involvement with a person start to affect the client’s decisions?  When does our forcing a particular process on a person put them at risk?  Shopping for a loan is anything by sexy.  It’s not nearly as fun as shopping for a car.  You can’t kick the tires, smell the leather or take a loan for a test drive.  However, it is a huge financial and emotional decision for a person, and I still feel that the process deserves some respect.  First time homebuyers need to realize that it is a huge deal, and that it should be taken seriously.  After all, a foreclosure will be just as painful whether you closed your loan online or face to face at a title company.  At some point, I could see the fast & easy closing process as a defense to foreclosure.  I think I’ll call it the “it happened so fast” defense.

I suppose my entire security argument is probably mute at this point.  Pandora’s box has been opened.  Just the recent changes in the health care industry have now given the government access to our medical information on an intrusive scale.  With the HMDA changes going into effect soon, they are doing the same thing with mortgage loan data.  Privacy is a thing of the past already.  I suppose the only thing left is service.  I do feel that the lines between service and efficiency are becoming blurred as the human touch disappears from the loan process.  Does anyone else feel this way?  Until next time… “I’ll be back”.


Why do we Comply?

An interesting study was referenced in the European Journal of Criminology.  They asked the question, “Do people comply with the law because they fear getting caught?”.  Their theory was that people abide by the law not because they fear the consequences but because they do not perceive crime as an “action alternative”.  They looked at relationships between crime propensity, deterrence perception and crime involvement for a few specific types of crime (shoplifting, theft from cars, vandalism & assault).  They claim that the results of their study indicate that the influence of deterrence perceptions on an individual’s crime involvement is dependent on his or her crime propensity, and that the threat of consequences was basically irrelevant for people who lacked a propensity to commit crime.  I can see how this might apply in many cases, such as not worrying about getting pulled over because you are driving the speed limit.

The thought of this study left me wondering about those of us who get paid to worry about the threat of legal consequences – the compliance department.  I have never met a competent compliance professional that wasn’t wound a little tight.  I think that comes with the job, and makes them good at it.  In many ways they bear the burden of the legal complexities that apply to the sandbox everyone is playing in.  They are the people who sit down with that regulatory auditor, explaining why you didn’t send initial disclosures in a timely manner or why you re-disclosed the fees to your customer 15 times.  Even when there is no explanation for a mistake, they have to respond to the findings & take the lumps that might result.  As if that wasn’t enough, they have to deliver the news to executive management & explain why they didn’t catch your screw-ups.

As of today, The Mortgage Lender Implode-O-Meter has the tally at 338 mortgage company implosions beginning from 2006.  I don’t know the number of jobs lost as a result, but no doubt it is substantial.  Nobody wants their employer to appear on that list.  This is why compliance people often wear their shoulders by their ears.  The legislation we are all wading through right now is full of gotcha’s.  There are multiple laws overlapping (each with a different acronym – shocking!), and so many gray areas that are not addressed, it’s nearly impossible to give quick answers to questions being asked.

It’s impossible to anticipate each and every scenario that may come up and know the impact of the 1888 page final TRID rule in all cases.  The best course of action seems to be the consistent application of company policies in compliance with TRID, and full documentation & explanation of any scenarios that venture into the no-man’s-land of the gray area.  If you can explain it, if it makes sense, follows the spirit of the legislation and is in the best interest of the client, then you have done due diligence.  Consistency & transparency in processes are key components.

So next time you are tempted to roll your eyes at a request or directive from your compliance department, think of all the people that have suffered a job loss due to mortgage companies going out of business.  Maybe that was you at one point.  The hoops we are asking you to jump through are not of our making.  We are just the lucky folks who get it from all sides and are doing our best to help everyone understand and implement the changes.  Doing your part to actually read announcements regarding implementation at your company, and asking questions to make sure you grasp the subject matter will go a long way!  A good compliance department will welcome your questions and take the time to explain the reasoning behind any new or existing policies and procedures.  We realize that most people want to do things the right way, and we are truly on your side.


Welcome to my blog!  This site was started as a creative outlet for an overworked professional.  I’m suffering from a disorder known as “TRID”.  It sounds rather fatal, but I’m fighting the good fight, searching for a cure, and trying to remain positive!  A little background for anyone not working in the mortgage industry … TRID is an acronym that was spawned out of the Dodd-Frank legislation.  It stands for “TILA-RESPA Integrated Disclosures”, and if you are remotely familiar with this ailment, you may be aware of how painful it is.

A little background on the author… I have been in the mortgage industry for about 15 years.  I’ve have been a loan officer, processed loans, worked as a closer & funder, loan product manager and a variety of other roles in between.  I have also been in the mortgage software arena for several years and now hold a mortgage compliance & technology position at a mid-sized lender in the Dallas, Texas area.  I’ve seen the ups and downs of the business and have learned most of what I know by just digging in and figuring it out, also known as trial by fire.

Here’s the thing…when asked as a child, “What do you want to be when you grow up?”, nobody ever says “I want to be in the mortgage business“!  Most of us get into this not knowing what its all about.  We might have known a loan originator that was making a killing, had a friend who hooked us up with an entry-level position where they worked, or we just randomly fell into it somehow.  Our job titles definitely don’t conjure up feelings of excitement or adventure like “bomb squad technician” or “fighter pilot”, but our contributions are still important.  We are the ones that help people get into their dream homes, begin a fresh start after a divorce, recover after financial setback and we keep the economy moving.  We work in an industry that is extremely intricate, complicated and fraught with land mines such as deadlines, product quirks, documents that lack clarity, ever-changing laws, emotions and personalities of clients and co-workers, and all of it rolled up in a ball of technology that isn’t always intuitive.  Some days, it’s all enough to make you want to quit – but for those of us that have been doing this for several years, we’re too tired to start over in a new career.  So we get up the next morning, and do it all again for our families, our paychecks, and because we accept the challenge.

So, that’s my situation, in a nutshell.  I am one of those people who can see the big picture situation as well as the minutia that is in play.  That’s one reason why this TRID legislation has thrown my whole world out of orbit.  Anyone in the business that is not completely freaked out about it, doesn’t completely understand it and will likely experience some unwelcome surprises in the coming months.  So, here I sit, trying to keep my marbles in tact, by writing a blog about it.

As I set up this site, I put serious effort into finding just the right image to use.  It had to be attention-getting and invoke thought, emotion & curiosity.  The image I chose grabbed me because of the contrast of beauty & elegance with destruction and neglect.  Many times, I’ve driven on country roads in the middle of nowhere, and as I look at the old abandoned homes and shacks, wondered what happened to the people who lived there.  Was there some kind of tragedy in their lives, or did they just move on to a different town?  Sometimes you can see the remnants of their lives on the deserted property such as trees they planted or the mailbox where they used to collect holiday cards from family far away.  Maybe I’m just nostalgic, but it struck me – what we do in this business is not really about houses or loans.  It’s about the people who come to us for help so that they can make a house a home.  They will raise their kids, fight with their spouse, decorate their Christmas tree, cook family dinners, grieve lost loved ones, and go about the business of life, all in that home we helped them obtain.  When I think about it this way, it makes me realize that what we do really has a purpose.

Just for grins, the other day I googled “the most confusing thing in the world”, which brought up a variety of lists.  I found one that was pretty interesting, composed of findings from a large survey of individuals among various walks of life.  In this list of things people found totally confusing, here is how several items ranked:  #6 – Buying a House, #7 – Politics, #8 – Insurance Policies, and #10 – Loan Interest Rates.  I couldn’t help but notice that these things were ranked more confusing than Foreign Languages – #14, Packaging on Kids Toys – 34 (I would definitely rank higher!), and Crop Circles at #35.  Buying a house is ranked more confusing than crop circles??!!!

With those results in mind (and in no small part due to a financial crisis), it’s no wonder that legislators have stepped in to protect the consumer.  I certainly agree with the idea of protecting people, educating and ensuring that everyone is following the rules.  Without rules, society falls apart and chaos ensues.  Part of me has to wonder though … if the 7 federal agencies that were formerly responsible for various aspects of consumer financial protection couldn’t do it, how is this one single agency going to do it?  Especially, when there seems to be an almost daily news thread regarding systemic workplace discrimination, racism and retaliation against employees at the CFPB.  So, we are being held accountable for all of our business practices to an agency of the government that is steeped in hypocrisy.  I have to ask…would anyone take restaurant advice from Gordon Ramsey if his kitchen were crawling with roaches?  Oh wait… this is Washington we’re talking about… logic doesn’t always prevail.  (I feel somewhat justified in my cynicism since Politics ranked at #7 on the confusion scale!)

So here we are, combining federal disclosures, attaching new civil liability to them, offering so-called “shopping tools” that aren’t accurate, applying multiple definitions of a “business day” in relation to disclosure turn times, and trying to figure out how to make software systems spit out French fries and ice cream.  Those of us stuck in the minutia of all things TRID related are either completely immersing ourselves in it, over-thinking, over-planning so that we don’t forget something or acting surprised here at the 11th hour & trying to come up with excuses for why we didn’t properly plan & heed the warnings of our “Chicken Little” co-workers.

I am proud to say I’m in the “Chicken Little” camp.  I see the writing on the wall in this thing.  I trust my gut, and it’s telling me this is going to be very ugly for all of us.  We planners of this world can’t do it alone.  Sometimes the people we depend on to take care of the pieces we can’t do ourselves don’t have their hair on fire like we do.  Sometimes our superiors don’t see the severity of the situation either.  You other compliance folks know what I’m talking about, don’t you?  That facet to our job can sometimes be the most frustrating of all.  We lie awake at night trying to figure out ways to sell our case to the people around us that are not plugging into the situation.  People think we’re crazy when we tell them what the TRID rule mandates.  Sometimes you want to shake them & say “Wake up – it’s no longer 2009”!  I have come to the conclusion that it is not within my power to steer the ship single handedly.  I am resigned to keep rowing, and scoop the water out of the boat the best that I can.  This is very difficult for people like me – we don’t like to fail, we want to have a team effort & help our team reach the finish line.  At the end of the day, all we can do is worry about the things we have the power to change, and try to do our best.  We can’t make people care or all of a sudden develop a sense of urgency.  I hope that someone out there reads this one day, and can relate to my experience.  I’m sure there are others like me, trying to engage others to no avail.

The one thing that keeps me going (other than a family I love) is the thought that no matter how bad this goes, nobody will die from TRID.  We have important jobs, but we are not performing brain surgery or organ transplants.  Nobody will be put six feet under because we make a mistake.  So I hope for the best, prepare for the worst, and try to remember what is most important in life.  Those are the things that didn’t show up at all on the confusion scale, like why my dog was happy to see me even though I was only gone for 15 minutes.  Keeping it all in perspective will be the key to surviving TRID.