Change management Rules for Mortgage Lenders

In one day I heard the QM regulation compared to Y2K and a nuclear bomb. Company A felt QM implementation was like Y2K because there was a lot of panic in the months leading up to January 10th and then nothing went horribly wrong the next day. This was clearly a testament to how well they prepared and found their process relatively unscathed by the new regulations.

On the other hand, Company B, who compared QM to a nuclear bomb going off in the closing department, said they are a victim of loan origination system problems. The strangest part of all, from my vantage point, is the fact that Company A uses an LOS that Company C thought was horrible and Company B is on the LOS that Company D said was working just fine.

By comparing lender’s experiences with implementing the January regulations, we see the core of successful change management in mortgage lending.

Rule #1

All current procedures need to be documented and include process flow charts. This enables the company to properly review the impact of the change and make adjustments. Company A’s procedures were already documented enabling it to get straight to the impact analysis and determine the best path for change.

Rule #2

All changes need a dedicated project lead and team. Don’t ask working managers to lead a project involving changes across multiple departments. The project lead needs unbiased authority to determine the best ideas for the entire process.

Rule #3

The LOS can’t be expected to solve every issue related to the process. Company A understood the tools they had to work with and made changes to the process accordingly. Many companies stood back and waited for the LOS provider to provide all of the solutions and found out too late that the majority of the solutions are found in the quality of the people handling the change.