Q&A with Wade Hamby of The Stonehill Group
MBA NewsLink recently posed questions to Wade Hamby, national director of sales and marketing with The StoneHill Group, Atlanta.
Hamby has more than 25 years of executive experience in mortgage lending, outsourcing and quality control. He oversees The StoneHill Group’s nationwide sales and marketing activities and is responsible for expanding use of the company’s solutions in the mortgage industry. A past recipient of the Mortgage Bankers Association of Florida’s Brown L. Whatley Award for his contributions to the Florida mortgage industry, Hamby has held leadership roles with AmeriCU Mortgage, Triad Guaranty and Hovde Financial. He is the former president of AboutYourMortgage.com LLC, a web-based mortgage services provider. He can be reached at whamby@stonehillgroup.com.
MBA NEWSLINK: The Consumer Financial Protection Bureau has indicated it plans to review and possibly revise its TRID rules. Do you expect that to happen? Why or why not?
WADE HAMBY, THE STONEHILL GROUP: It’s pretty clear that there is a general lack of clarity in the regulations, so we expect there will be revisions. Most of the problems that we have seen with TRID have been caused by different interpretations of the rule, and to date, the CFPB’s guidance on these issues has not been much help. This general lack of clarity hits smaller lenders particularly hard because they are least able to afford attorneys or other resources they need to help them.
Clarity is particularly needed in how TRID applies to construction loans. The guidance from the CFPB on one-time closings for construction loans is so nebulously worded that some of our clients simply stopped offering this product. In general, I think lenders have no trouble complying with regulations once they know what they need to do and how to do it.
NEWSLINK: How well did the real estate finance industry in general adjust to TRID?
HAMBY: In spite of the issues I’ve just mentioned, the industry as a whole has responded amazingly well to TRID. There have been hiccups, but it obviously wasn’t the end of the world. Many lenders believe things are actually better, since we have combined three different disclosures into two.
By far the biggest issue has been the various interpretations of the regulation, which has made it difficult for correspondent lenders. For example, not all investors interpret the Closing Document the same way. If you’re selling loans, you have to segregate them accordingly instead of sending them to whoever offers the best execution, and that’s difficult. We review the closing processes of many lenders and we see this issue come up continuously. Having said all that, on the whole, I still think lenders have adjusted quite well.
NEWSLINK: Why did The StoneHill Group see TRID as an opportunity, rather than a barrier?
HAMBY: We saw it as an opportunity to better serve our current and potential clients. Any time there is a major change like TRID, lenders are going to need help, and that’s what we do. Indeed, the demand for our services has increased in every department after TRID went into effect last October, especially in our fulfillment division with respect to our closing services. There’s no doubt TRID has been a key driver behind our double-digit growth.
Of course, TRID was an adjustment for us, too. Our clients expect us to keep them compliant with TRID, so in order to assist them better, we have added about 100 additional questions to our pre-closing and post-closing QC checklists, which were already very detailed.
NEWSLINK: What other regulations should lenders be focused on?
HAMBY: It depends on the type of institution. However, I am seeing the CFPB starting to pay a lot more attention to servicers. Lenders that service their own loans have to be cognizant of the Bureau’s requirements and whether their vendors are in compliance. Right now, the CFPB is looking closely at how servicers are handling consumer requests and basically all communications they have with borrowers, whether their loans are performing or not. The Bureau has made it clear they are concerned about any activity that puts the consumer at risk. To help servicers deal with this increasing scrutiny, we have added significant resources and staff in our Servicing QC division and enhanced our loan-level QC reviews for servicers.
NEWSLINK: What is the next phase of outsourcing going to look like?
HAMBY: Outsourcing strategies differ based on size of the institution, but in general, I think we’re going to see much more automation used in outsourcing–both in the QC process and in loan fulfillment. From a cost standpoint, technology is a great way to offset the impact of additional regulatory requirements. Its value in that regard continues to grow.
In general, the demand for third-party help for quality control and compliance is ingrained in the fabric of mortgage finance, and that will continue. Anything that can be outsourced with minimal costs will be–trailing docs, insurance, QC services, you name it. Almost anything can be outsourced and delivered at variable costs that can be managed.
The challenge for lenders is to find a balance between making home finance as readily available as possible, meeting regulatory requirements, and making a profit. As it stands, I don’t think lenders take enough advantage of the existing services that are out there. If they want to succeed, it’s incumbent on lenders to ask for help when they need it–and to be able to recognize when they need that help.
(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@mba.org.)
