Mortgage Training Needs to Balance Compliance, Efficiency

Balancing investment in employees with the cost to train them. Credit: ThinkStock.

The need to be compliant and distinguish one’s business, but also to operate efficiently, all play into mortgage companies’ decisions about training and career development today, according to industry executives interviewed for this article.
“Training should be considered an investment and not a cost,” said Judy Wheatley, senior vice president, Indecomm Global Services.
“In addition to learning being an important recruitment and retention tool, the result of an effective corporate learning culture brings a measurable return on a company’s investment,” she said. “Loan defects are reduced, which eliminates the cost to cure, regulatory fines and repurchase costs, etc.
“Workflow processes are more efficient due to reduced handoffs and reduced escalation issues and most importantly, consumer experiences are improved with knowledgeable professionals handling their transactions,” Wheatley added.
“We can’t differentiate ourselves with a Fannie Mae or an FHA loan, but we can with professionalism and the delivery of services we offer,” said Daniel Jacobs, president of retail branching at Residential Finance Corp., when asked about the value of training.
“Since the meltdown, consumers have had a heightened awareness and have been expecting us to deliver. That is why you really have to focus on employee development,” he said.
According to Jacobs, whose company originates retail residential mortgages through both local branches and call centers, “There is no question in-person training is the best, but it is not always the most practicable.”
The alternative is automated training, and Jacobs thinks the answer can in some situations where in-person training is not possible, a happy medium between. Professional education may be Internet based, for example, but include the involvement of a live trainer. His company has both training experts and an online learning management system.
The next wave in training for the mortgage industry lies in more interactive automated learning, according to Ghazale Johnston, senior executive, Accenture Credit Services.
Johnston said among the latest forms of this are more interactive forms of automated learning, such as simulators, videos, multimedia messages and self-directed tools that can deliver professional education efficiently. Some training aimed at reinforcing other learning, for example, can be done in as few as three to five minutes.
When asked how widely such methods are being used in the mortgage industry, Johnston said, “Right now there is more reliance on traditional tools, but some are trying to carve a path.” She added that she does believe that it will grow into a widespread trend in the future.
“I think it is a big departure for our industry,” Jacobs said, when asked how widespread interactive, automated training is. But he indicated it makes sense for reasons that include its ability to reach individuals who learn in different ways as well as track comprehension and performance.
“Some are very auditory, some are more visually oriented,” he said. Jacobs said training may as a result include a combination of PowerPoint presentations as well as an audio-visual component and role-playing used for professional learning and testing purposes.
When asked if the numerous and evolving compliance demands that have been a key issue in general for  the mortgage industry faces are a key catalyst for training, Accenture’s Johnston said, “Regulatory is certainly one aspect and that continues to be at the forefront of a lot of lenders’ minds.”
But “there are definitely lots of different opinions” and motivations in the industry when it comes training, Johnston noted. These include the need to keep up with changing investor guidelines, and have efficient ways to bring on originators when refinancing volumes surge, as well as the need to differentiate in terms of service levels.
For originators, meeting regulatory SAFE Act professional education requirements is “the baseline” for training, said Jacobs.
“We have what’s required for the regulations and the licensing, and we are all looking for the best, most efficient, way to do it so that trainees absorb it effectively,” he said, but added, “We’re really expanding our focus for training far beyond that.”
The need to reduce indemnification risk was a motivator for one large national lender that Indecomm worked with on government insurance knowledge assessments, which the company used as a basis for promotion eligibility and to design specific training to reduce knowledge gaps, Wheatley said.