There’s no denying that much of the recent news about the housing and mortgage market has been negative. This includes housing inventory shortages, higher home prices, higher mortgage rates compared with 2022, and affordability challenges for would-be borrowers. But, if we flip the lens, many opportunities are embedded in these challenges. We can help your originator team reset their focus, strengthen new, relevant skills, and create a playbook for success in 2023.

Let’s face it… the last week has not been pretty for the banking industry with the implosions of both Silicon Valley Bank and Signature Bank, while still, other regional banks teetered but appear to have been pulled back from the precipice. Pure and simple, this was total mismanagement of risk between the assets on their liability side as well as a textbook case of how a bank should not be run. As a former colleague of mine used to say: “Nobody gets to bet the Bank.” Truer words…

Like all lenders, not one of you ever got into this business to manage compliance on a day-to-day basis, but here at SCA, we sure did.

SCA’s compliance consulting team comprised of industry veterans and leaders help financial institutions just like you to maneuver through the ongoing challenges and minefields associated with regulatory compliance in the areas of CRA, Fair Lending, HMDA, ATR/QM, RESPA, TRID, Flood Insurance, Mortgage Servicing rules, HOEPA and REMA.

Loan Origination Solutions

Servicing has increasingly become a focal point of regulators in the mortgage industry. When production picks back up, are you sure that your team is equipped with the right tools to succeed?

Abrupt increases in mortgage rates and decrease of production and loan volumes has allowed lenders to focus on loan quality and salability to investors. The overall critical defect ended Q1 2022 at 1.93%, representing a .02% decline from Q4 2022. Q2 2022 purchases alone, accounted for 77.24% of all faults, up 28% from the share of 60.18% in the prior quarter, while refinances accounted for 22.76% of defects this quarter.

In today’s world, most of us could not imagine living without the modern advances made by the use of technology and automation. It’s no different in the lending world; so many of our processes are reliant on automation- whether you realize it or not. Do you use an LOS to process loan applications? Automation. How about onboarding to the core? Automation. Even if you don’t use an interface, your core has automation by way of applying product defaults, generating daily reports, the posting of general ledger entries, and more. Initially, the use of automation was a way to remove the duplication of efforts and speed up a tired process. But now, we rely on it so much that often we forget to understand the mechanics of how it all works.

In this series we will highlight some of the folks that keep the SCA machine moving forward and continually improving year over year to best meet our clients needs.

This week, we’d like to introduce one of the newest additions to the SCA family of consultants: David Brennan

O.K. So you just hit the button and submitted your 2022’ HMDA LAR to the CFPB, March 1st to meet the deadline. Now what? You realize you are already two months behind in working on and reviewing your LAR data for 2023.’ Does it ever end?

Discover how you can simplify the HMDA reporting process by using SCA’s team of industry experts to integrate all aspects of the HMDA LAR. Let SCA reduce the stress and the process for your financial institution, making your LAR submission as worry-free as possible by:

Loan Origination Solutions

Spillane Consulting Associates’ experts have hundreds of years of collective experience in managing origination operations of various sizes around the country and we are here to put our expertise to work for your organization. We will make sure that your staff, your systems and processes, and your technology are all optimized while ensuring that all compliance regulations are satisfied at every step of the process.

Pitchers and catchers began spring training practice this past week and before you know it, the spring market will be right around the corner. Will your institution be prepared to increase your commercial real estate or residential loan volume for your balance sheet this spring or, do you need an alternative due to the current lack of loan origination volume and low housing inventory? If so, the SCA Mortgage Exchange, a mortgage banking advisory group has several pools of loans available for bid, to fill that niche.

In this series we will highlight some of the folks that keep the SCA machine moving forward and continually improving year over year to best meet our clients needs.

This week, we’d like to introduce the leader of our QC team: Mindy Molina-O’Leary, Senior QC Analyst

Thank you to all of our clients for another successful and productive year of growth. Here are some of the engagements that we completed in 2022. Call us today for a free consultation to see how SCA can help you reach your residential lending goals in 2023.

The SCA Mortgage Exchange, a mortgage banking advisory group is pleased to present an offering of $249.8M pool of residential mortgage loan assets consisting of 496 loans. The breakdown of the pool is as follows:

• 111 fixed-rate loans with a UPB of $57.5M

• 385 adjustable rate mortgages with a UPB of $$192.3M

• The WAC is 4.33% with a remaining term (WAM) of 353 months along with an original LTV of 75.02% and a DTI Ratio of 35.37%. The average FICO Score is 752.

The SCA Mortgage Exchange, a mortgage banking advisory group is pleased to present an offering of $79.3M pool of single-family owner occupied residential mortgage loan assets consisting of 1312 loans. The breakdown of the pool is as follows:

The WAC is 5.624% with a remaining term (WAM) of 229 months along with an LTV of 65.41% and a DTI Ratio of 34.83. The average FICO Score is 755.

For those of you who have not been following SCA’s blogs or newsletters for the past few weeks, much of our attention has focused on CRA, Fair Lending and HMDA.

Just last week, SCA posted an article highlighting a California Bank penalized by the Dept. of Justice (DOJ) to the tune of $31M for refusing to underwrite loans to predominately Black and Latino communities, the largest redlining settlement in department’s history.

This could never happen to you, right? If not, why not? Ask yourself the following questions:

No matter your function in a financial institution, in all likelihood you touch at least one technological platform daily- whether it is a loan origination system, a product and pricing engine, a loan interface software, a HMDA database, or your core operating system. You may have been involved in the onboarding of this software, or, as in many cases, you’ve inherited the system and all best practices for use were passed on to you like tribal knowledge. It’s not uncommon that the system(s) on which you’re operating (or the spec settings defaulted on them) outdate your tenure at the company- given the cost, time constraints, and high level of involvement it takes to change them. What’s also not uncommon is that those responsible for using these systems don’t have a full understanding of how they work and how or when to make changes to them.

Challenging times present unique opportunities to grow and adapt while others remain stagnant. The mortgage industry is currently experiencing a significant decrease in pipeline volume. Successful lenders exploit low volume cycles by utilizing the increased internal bandwidth available to review and update current processes and implement new technology platforms.

SCA consultants are extremely familiar with the cyclical nature of the mortgage industry. We are lenders first. We have over 40 years of industry experience, and the SCA Technology group is ready to partner with you every step of the way to help you leverage technology to meet your business goals. We help you evaluate, implement, and administer solutions that meet your exact needs.

In this series we will highlight some of the folks that keep the SCA machine moving forward and continually improving year over year to best meet our clients needs.

This week, we’d like to introduce a new addition to the team: Bill Dolan, CMB, AMP, Director, Business Development