Mortgage compliance regulations have increasingly forced loan services of all sizes to adopt technological solutions to ensure that all loans and business practices are fully compliant. The penalties for non-compliance are so steep that it makes no sense to operate without minimizing risks when it comes to compliance. For this reason, there has been an increase in technological innovations associated with the mortgage sector. These new technologies can help servicers operate compliantly and enhance their processes in many ways.

New Technology Innovations for Mortgage Industry

“Traditionally, mortgage servicing lagged far behind the originations sector in terms of technological innovation. Loan origination software (LOS) businesses have long been engaged in organic innovation, as well as making acquisitions, with the goal of providing a more bundled solution.” (1) As compliance and regulations have become far stricter in the wake of the housing market crash, lenders need automation solutions to ensure that they are in compliance throughout each step in the life of their loans. Human error, however accidental, is simply no excuse for a breach. Automation reduces the risk for error so that a lender can operate with the peace of mind that comes from being in full compliance.

Streamlining the Loan Process and Beyond

Although the loan process is certainly enhanced by mortgage software, new regulations suggest that lenders must continue to monitor the loan long after the “loan is closed and booked.” For effective monitoring at a sophisticated level, new software has been developed for this purpose. The need to comply, therefore, has certainly driven innovation in this mortgage automation sector considerable in the past five years.

Coping with Change

Because the compliance landscape continues to change, many loan providers rely on software to help them manage change so that they meet compliance regulations without fail. A software system that employs alerts can help loan officers operate in full compliance. In this way, the automation is a huge safety net for the lending agency that safeguards compliance just as it streamlines the loan process with greater accuracy and efficiency. Furthermore, there is an emerging deficit of talented senior executives because “many executives are leaving the industry to pursue careers outside of residential mortgage, where the scrutiny of federal regulators and investors is less intense.” (3) Since following new compliance regulation has become an intense process, many senior executives work long hours and gets pressures from investors; the budget for many banks can no longer afford the salary of the executives. Banks must also cope with talent retention to retain qualified senior executives to continue to drive innovation in this industry.

Video: Introduction to Mortgage Compliance January 2013


  1. Information Week, “Mortgage Compliance and Its Impact on Bank Technology,”
  2. LoanLogics, “Life-of-Loan Performance Analytics, Management, and Monitoring,”
  3. Accenture, “The Rising Cost of Mortgage Loan Servicing,“