Brad Bogel, president of DataVerify, recently sat down with Thomas Knapp, CIO of Waterstone Mortgage, to talk about why Waterstone Mortgage and DataVerify have been a good fit for each other and what Knapp believes recent and upcoming changes in the industry could mean for lenders who are not investing in powerful workflow and risk mitigation solutions.
Bogel: How long has Waterstone Mortgage been using DataVerify? What initially was the determining factor in choosing DataVerify as your workflow and risk mitigation provider?
Knapp: Waterstone Mortgage has been using DataVerify as a trusted vendor for over three years. In 2016 we performed a competitive analysis of the fraud vendors in the market as we looked to improve the efficiency and quality of our internal fraud processes. This was part of our larger effort around digital mortgage to improve the efficiency of our workflows, improve quality and accuracy of our fraud processes, and to reduce overall costs. We also were looking for a solution that integrated well with the Encompass Digital Lending Platform and was built on modern architecture that would allow us to effectively integrate with our internally developed applications.
Bogel: What have you found to be the largest customer benefit when using DataVerify?
Knapp: I would say the breadth of DataVerify’s solutions in being able to check multiple fraud databases and to return both the reporting and data we need to further evaluate the loan file. As with all relationships, the success is also largely dependent upon the quality of the DataVerify team we work with and their ability to understand and respond to our needs. We receive outstanding support and have frequent and meaningful dialogue with our account team.
Bogel: What values and/or business goals have you seen DataVerify support and/or help you achieve?
Knapp: We are a purchase loan-focused lender and our workflows are built around the ability to process purchase loan transactions efficiently, with high quality and in a timely manner. In order to accomplish this, we need strategic allies like DataVerify who understand our business objectives and can mold their solutions to fit into and improve our processes.
Bogel: At DataVerify, we like to talk about the “automation of workflow” for our customers. Is the DataVerify automation of manual tasks something that you have seen play a role in how Waterstone Mortgage does business?
Knapp: In the bigger picture of the digital mortgage, we are focused on improving the borrower experience, providing solutions to enable our loan originators to be efficient and competitive, and to reduce our operational costs while improving quality. To accomplish this, we are working on automating our workflows and ordering of services, such as fraud. DataVerify is tightly integrated into Encompass, our Loan Origination Solution, which allows us to engineer the ordering and review of fraud results efficiently and seamlessly into the loan origination process.
Bogel: The DRIVE report can be pulled multiple times throughout the loan process. Has your team taken advantage of this aspect of DataVerify and if so, how has it affected your business?
Knapp: We have configured the DRIVE report to our specific needs and preferences. We order the DRIVE report at key milestones in our origination process and are able to also import the DRIVE data, which allows us to automate the inspection of the DRIVE data.
Bogel: At DataVerify, we find a lot of joy in creating “out of the box” solutions that we can truly customize to fit specific lender’s needs. What customization has been most helpful for your employees?
Knapp: I think the ability to customize the inclusion of customary, industry exclusionary watchlists into DRIVE has eliminated manual tasks and allows our team to perform the fraud check consistently across all exclusionary databases.
We recently completed a development project which highlighted the functionality of DataVerify. Our previous processes provided only company names and participant names to DataVerify which took between 30-90 minutes to extract. The new process we developed now includes alias companies, alias participants, address, state, city, zip, date-time added, notes and more in addition to company name and participant names (where applicable). By providing more complete data to DataVerify, we have been able to reduce potential “loan matches” within Encompass and reduce time spent tracking down whether the “potential loan match” is legitimate.
In addition, the accuracy of the tool proves time savings in re-reviewing the file for a new investor with the same loan participants. Having to re-evaluate the loan for a different investor could mean duplicated efforts within the Operations and QC teams and ultimately impact the salability of the loan. The new process reduces risk to the company, as it further helps to eliminate the possibility of repurchasing the loan when exclusionary data points are searched.
Bogel: Digital mortgage is obviously a hot topic in the industry and the concept of a digital mortgage seems to be the main focus of everyone. How do you see DataVerify playing a role in the digital mortgage?
Knapp: I realize the term digital mortgage may be overplayed but we do have digital mortgage initiatives as a key pillar of our strategic plan. DataVerify can contribute to this strategy in three areas:
• Through automated service ordering from Encompass, the DataVerify DRIVE report can be automatically ordered based on loan milestone and conditions we set. We now order the DRIVE report through Ellie Mae’s Total Quality Loan (TQL) Program, which provides significant processing efficiency.
• The DRIVE data is returned to Encompass, which allows us to incorporate the data into our workflows and to automate additional tasks based on the inspection of the data.
• We believe the quality of our loan origination processes are improved by timely execution of the DRIVE report and the ability to react to results sooner in the loan origination process, which ultimately allows us to close the loan in a more timely manner.
Bogel: As the mortgage industry evolves to meet consumer expectations of speed and efficiency from point of sale to closing, what do you see as the biggest challenges lenders face?
Knapp: I think our borrowers expect – and rightfully so – a smoother and more timely process to apply for and close on their mortgage loan. As mortgage companies, we are challenged to wisely invest in appropriate technology and to choose technology vendors that share our vision and allow us to meet our goals and objectives.
We believe that alliances like DataVerify who share our vision of the digital mortgage allows us to provide a better experience for our borrowers. We also need to continually address an internal organizational challenge as we develop and execute our business strategies – changing management and ensuring that our employees are appropriately trained to adopt new technologies and solutions.
Bogel: How have you seen DataVerify work together with you to find solutions for challenges?
Knapp: We have a mutually beneficial relationship with the DataVerify team. The communication between our two teams is essential – we are able to be open and transparent in our relating our strategies and needs with DataVerify and they have responded consistently and creatively to our needs. Likewise, we are open to working jointly to design and test new solutions.
Bogel: What is the biggest thing you think that lenders who are not using DataVerify are missing out on?
Knapp: I think the breadth of the product offering and the evolution of the product to include offerings like their Flood Service. We expect DataVerify to continue to be a progressive and innovative company that responds to our needs and to provide workflow efficiencies and quality improvements that support our digital mortgage strategies. We rely on DataVerify’s internal research and development to keep their products current with available technology and with trends in the fraud and reporting industry, as well as additional product offerings such as flood.
Bogel: What do you anticipate to be the biggest shift in the industry over the next decade, how will it change the current home-buying process, and how is Waterstone Mortgage preparing for this change?
Knapp: I think we will continue to experience the digital mortgage evolution – in areas like eClosing, process automation, artificial intelligence and business intelligence solutions. Investments in technology and compliance solutions will be key to successful mortgage lenders. We have encouraged innovative thinking and collaboration throughout our company to allow us to evolve with the changing expectations of our loan originators and borrowers.
I believe that companies that are effective in developing meaningful partnerships with technology companies to leverage their investments in technology solutions as well as developing relationships that provide new distribution channels to our products will be essential for successful mortgage lenders. At the same time, I believe that our local loan originators will continue to serve a key role in communicating these changes to our borrowers and provide guidance during the shifts in the industry.
