Q/A with Alok Datta of ATPR Inc.

MBA NewsLink recently posed questions to Alok Datta, president of ATPR Inc., Dallas.  

ATPR provides technology based services for the real estate lending and settlement services industry. SmartProp is a next-generation search product delivering a range of property reports. It is backed by a nationwide abstractor network and a customer service team. Datta can be reached on alok.datta@atprinc.com.  

MBA NEWSLINK: The Consumer Financial Protection Bureau has said–repeatedly–that it will be scrutinizing and cracking down on the actions of third-party services providers and hold lenders accountable. What exactly does this “threat” mean, not only for a third-party provider such as ATPR, but also for lenders?  

ALOK DATTA: We compliment the CFPB for putting in right checks and balances in the overall process and we welcome this recommendation. This means that the “back end” of the transaction (as it has been known for so long) will require increased quality control and oversight from the lender and all parties involved. The lender’s service providers have quite a bit of contact with the borrower and touch a significant amount of NPI (Non Public Information) over the course of the transaction.  

Third parties should be prepared to offer documentation about how they protect NPI and show that their closing practices comply with all consumer protection mandates. Documentation about how carefully they vet their own providers is important as well. Lenders must be able to prove that their vetting and oversight processes for third party service providers are thorough and comprehensive. So too, do third party service providers who retain their own vendors to process an order.  

In doing so, these providers will be able to position themselves to manage a lender’s risk much better (including engagements with potential fourth party providers). For established third party service providers, like us, this won’t be a problem, as we are already operating at a high level. If anything, it will be an opportunity for the star performers to further differentiate themselves so we are looking forward to this change.  

NEWSLINK: Assuming this threat is not empty, what do lenders need to do to be sure their houses are in order when the CFPB comes?  

DATTA: It has been our experience that the best prepared lenders are those which establish clear and transparent processes; consult with numerous in-house and third party experts about the regulation, rule or statute, and are willing to adjust and adapt based upon new input.  Technology plays a crucial role in making the compliance process more efficient as well as documenting a lender’s efforts. The strongest third party providers have the advantage of observing what multiple lenders are doing to adapt to regulatory requirements, and can share that (to the degree that confidentiality isn’t violated) with their partners.  

NEWSLINK: Some servicers are consolidating their servicing operations in-house; others don’t want the complexity of having servicing operations. What would you tell a potential client about the advantages of outsourcing servicing?  

DATTA: Each option comes with its own pros and cons. In general, outsourcing providers tend to bring in their own best practices, industry knowledge and technology components. With these, they are usually able to offer innovative options in managing operations, with improved quality and reduced cost.  

NEWSLINK: How has your company’s ability to provide accurate data evolved over the past several years?  

DATTA: Over the past several months, we have worked hard to build a ‘trust network’ of field abstractors and brokers across the nation. We realize that our clients consistently expect data accuracy, and that too at aggressive turnaround times. Leveraging technology and improved processes, we have ensured that we are able to deliver accurate data to our clients, at turn times that are unmatched in the industry.  

Strong technology is only as effective as the people making use of it, so we have placed special emphasis on the quality of our personnel, we employ to deliver that data and how we train and manage them. We are also finding that our clients-and the industry in general-are demanding increasingly more granular and sophisticated data. This is a positive development and gives ATPR the opportunity to stand out. Customization is also becoming a “must have.” Lenders are no longer willing to “bolt on” the provider’s technology or process. We have to deliver data in a seamless fashion on the terms our clients demand.  

NEWSLINK: What new challenges does your company anticipate needing to address in the coming year?  

DATTA:As the cost of origination increases and customers’ expectations go up, lenders will be keen to engage with service providers such as ATPR to improve efficiencies and manage costs better with improved Turnaround time. Established service providers will also be called upon to marshal “fourth party providers” and prove that we have vetted them effectively while managing/overseeing them consistently.  

Increasingly, as lenders consolidate their vendor management functions to shrink their points of exposure, they will lean upon third party providers (and their own vendor networks) such as ATPR to prove they are operating in accordance with the expectations of all applicable enforcement agencies and regulators. Finally, we believe our lending clients (at the impetus of their investors and upstream providers) will demand increasingly sophisticated reporting mechanisms. We believe that we are well positioned to deliver to these requirements and feel it will be a positive step forward for the industry.  

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor does it connote an endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions; articles and/or Q/A inquiries should be sent to Mike Sorohan, editor, at msorohan@mortgagebankers.org.)