[u]PERSON THE WEEK[/i][/u]: As the mortgage banking industry continues to keep up with the acute changes in regulation and policy – the Dodd-Frank Act, government-sponsored enterprise (GSE) reform and the alphabet soup of regulatory concerns including the thorny Real Estate Settlement Procedures Act (RESPA) – it often seems that one has to run faster in order to not be left behind.[/b] But is the industry keeping up with the new demands placed upon it? This week, MortgageOrb discusses the challenges of a fast-changing industry with Dan Thoms, executive vice president of AllRegs, headquartered in Eagan, Minn. [b]Q:[/b] How would you define the state of today's business intelligence for the mortgage banking industry? [b]Thoms:[/b] I have been in the mortgage industry for 15 years, and during that time, I have had the privilege of working with many key executives at most of the top 100 lenders in the industry. Through these conversations, meetings, dinners and events, I feel that I have a good sense of the state of affairs on a number of issues. Currently, the mortgage industry is dependent upon using two-dimensional reports for business intelligence and is overwhelmed by data. There are millions of transactions, hundreds of procedural steps, thousands of regulations, and thousands of products and guidelines – combine all of them, and there's a perfect sandbox for new business intelligence tools. In addition to more staffing and working more hours, I have seen a much higher dependency and reliance on third-party vendors that provide support services for interpretation and implementation of existing and new law and regulation changes. [b]Q:[/b] In the face of the 2,300-page Dodd-Frank Act and the upcoming debate on GSE reform, how has the state of business intelligence changed for mortgage bankers? [b]Thoms:[/b] As I speak to companies across the country, I am finding that the industry is extremely concerned about ever-changing regulations. Mortgage bankers are professionals and want to be recognized as such. They want to comply with laws and regulations, and they constantly say to me that they want to be ethical and do the right thing. And I believe them. Nobody asks how to evade the law; they ask how to abide by the law. This is an absolute testament to the professional, ethical nature of the mortgage banking business. We continue to see hundreds of changes to state law and ever-changing federal regulations. Mortgage bankers continue to have a very difficult time a) acknowledging that a law affects them, b) understanding the law and c) changing and retooling internal processes to become compliant. [b]Q:[/b] There have been a number of complaints across the industry regarding changes in compliance regulations, particularly in regard to RESPA. On the whole, how has the industry adapted to the new compliance requirements? [b]Thoms:[/b] When the RESPA changes came out, we were inundated with questions to help in understanding and comprehending the rule changes. It has been a very hard road for the industry to meet these compliance requirements, and it is still an ongoing process. For the most part, it has been an exercise in doing the best everyone can do with the information provided by the Department of Housing and Urban Development and interpretations by vendors and law firms. What I have seen is that adjustments still have to be continually made to interpretations, policies and procedures. This is due to feedback and purchase rejections by loan investors, because each investor has a different interpretation of the new RESPA requirements. [b]Q:[/b] The economy remains weak, particularly in regard to unemployment. Is it possible to have a vibrant mortgage banking industry in the midst of a distressed economy? [b]Thoms:[/b] I am bullish on the industry. I hear from constant phone calls that refinances are up, that many locations around the country have hit bottom and are beginning to turn around, and folks seem to be very busy at the end of the month. I consider all of these key signs of a vibrant mortgage in
