Picture a bridge. Whether it is the Golden Gate Bridge or a bridge across that tiny creek near where you grew up, bridges are able to overcome gaps in a way that no other structure can. They have the ability to connect. However, the gaps don’t always need to be physical in nature. They can be gaps between people, entities or ideas.
Regulatory Risk Management Requirements
In October of 2013, the Officer of the Comptroller of the Currency (OCC) issued a bulletin that stated they expected a bank to “identify, measure, monitor, and control risk by implementing an effective risk management system appropriate for its size and the complexity of its operations.”
Banks use loan origination software (LOS) systems to organize the mortgage process, but these systems generally aren’t meant to manage risk. The LOS systems vary in each bank. Large banks normally build their own LOS systems while small banks buy them off the shelf.
These various LOS systems don’t typically communicate well with the other silos’ systems, like title companies. Both title companies and banks create their own Settlement Statements on their respective systems and the only way to completely verify the information is through a time consuming manual process prone to human error. This weak process almost invites fraudsters to get involved and has lead to billions in title defalcation.
It is as if every bank and title company is stranded on separate islands and is only be able to communicate through basic hand gestures.
To meet these OCC regulations, the larger the bank, the more complex software and procedures it needs. Smaller banks, while still responsible, will not be held to the same level of complexity. Jamie Corbin, SVP of Sales at ATS Secured, says it is anticipated that “after bank examiners are out in the field and adapt to these new expectations of the larger banks, they will soon become accustomed to those standards and expect them from the smaller banks as well.”
Operational Risk Technology
Instead of creating another silo that further separates information, wouldn’t it be helpful for banks to have a software platform that can bridge all these silos together? A software that is able to “travel between the islands” and “speak the same language” between various service providers and title companies?
The RESPA-TILA Disclosure Rule says disclosures need to be sent three days before closing, which is at best cumbersome and at worst non-existent with current technology. Banks need a more efficient way to document all changes and track them, which would significantly speed up the process. When the regulators come in and want to look at a document, banks need have them readily there at all times and have a timeline tied to every single document. They need to have the capacity to disburse the data so everyone works off the same information. This software should be able to communicate with all silos, so that the “islands” are all informed on what they need to know, in an easy, efficient and secure way.
The system banks use shouldn’t matter; a bridge has the capacity to communicate with all platforms. This is what banks need so they aren’t stranded anymore. This is the ideal that ATS Secured upholds to overcome the gaps in this process: a bridge.
Want to make your mortgage process easier and more accurate? Contact ATS Secured today.