Brian Lynch: A Deeper Dive into Mortgage Accounting: Financial Reporting is More Important Than Ever Before

Brian Lynch is President of Irvine, Calif-based Advantage Systems, a provider of accounting and financial management tools for the mortgage industry. More information on the company can be found at   

Brian Lynch

While the mortgage industry saw record earnings and growth in 2020, 2021 may prove a bit more challenging as interest rates have ticked up and housing inventory remains low.  That said, the government just committed to injecting $1.9 trillion back into the economy.  The pace of vaccinations is way ahead of predictions and the experience of working remotely may just give a boost to the suburbs.  One thing is for certain, we will see changes in 2021 and staying on top of those changes will make the need for timely and accurate financial information, at all levels of management, a must.

Financial reporting should go beyond just the accounting department, however. Loan officers, branch managers, c-level executives and more need access to granular financial data and in-depth accounting tools in a changing market. The pandemic rapidly spurred the adoption of tech solutions and heightened the industry’s reliance on technology – from helping lenders operate, to supporting loan officers in their day-to-day tasks, to increasing daily efficiencies for the accounting department.

Much like a lender’s other operating systems, financial systems should be updated in real-time, telling managers what is working and what isn’t. This enhanced reporting is critical to helping the accounting department while also supporting branch managers and loan officers as they manage their daily responsibilities. Enhanced reporting helps lenders make better business decisions not only for their internal teams, but also for their borrowers by providing loan officers with the financial data needed to offer the right loan to the right borrower.

Tools Uniquely Designed for The Industry Are Key

Just as there are loan origination systems and document management platforms specifically designed for the mortgage industry, the same should apply to financial management solutions. Mortgage-specific tools can better streamline the accounting department’s everyday processes while also allowing necessary data to be shared in real-time with branch managers and other executives. This is key in the competitive rate environment that the industry is experiencing today, where speed-to-close is a market differentiator. Today, lenders are leveraging data on a weekly, daily or even hourly basis that used to only be accessible once-a-month (at most).

Modern accounting tools enable employees to drill down (and through) the data and see more detailed information, filtered based on each employee’s level of clearance. Company executives have a more complete view, with data for all branches, while branch managers and personnel may only have access to data relative to their specific branch – analyzing their loan officers’ activity and corresponding loans.

By their nature, these tools promote greater levels of collaboration between departments, helping deliver real-time financial data, saving the company and its employees time and money as well as boosting productivity. The right mortgage accounting system should engage more than just the accounting department – it should bring intuitive, relevant information to employees at all levels – promoting better, data-driven outcomes.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at; or Michael Tucker, editorial manager, at