Be Good and Lucky

By Lloyd Booth, President of Blueberry Systems

Can you afford to have pretty good data?  Can you afford tolerable investor pricing variances?  Can you afford to usually be compliant?

There’s an old saying that argues, “It’s better to be lucky than good.”  While true in many instances, it shouldn’t be in your company’s vision statement!  And you certainly shouldn’t put it into practice either.  Why not be both good and lucky?  

Control the good by investing in those technologies that offer true data integrity.  This means re-evaluating your existing technology:
•    Do I have data in mislabeled fields because I can’t expand my database?
•    Does my production process include work-arounds?
•    Does my production process include the re-entry of data at one or more points?
•    Does my compliance process include any manual verification of government or investor requirements?
•    Does my company budget include a line-item for pricing variances or buybacks?

If your answer is ‘Yes’ to any of these questions, it’s time to change your vision statement.  Otherwise, you’ll be looking at the metaphorical six feet of dirt above you.  Instead, give yourself breathing room and conduct an honest evaluation.  Make the necessary changes.

I have long been a proponent of adopting a universal data model.  This model is fundamentally different than the standard database of record.   The three pillars of the universal data model are:
•    An extensible database
•    Full integration of the entire production process
•    A data audit framework to capture the various states of any given data in real time.

Having a database that is adaptable and limitless is the first and easiest component to fulfill.   Any database that won’t give you the fields you want is a perfect example of what’s wrong with many technologies that make you work around them.  It should be the other way around.

Integration is critical.  If you have to port data between systems and applications, you increase the risk of user error and compromise your data.  Keeping everything in one database, in one system, on one screen even – not only improves the quality of your data but naturally improves the workflow and user experience too.

Finally, a data audit framework translates your data into actionable intelligence.  This is where your business rules are enforced.  The more dynamic the framework the better.  Its most critical function is to provide for you the various states of data in any loan as it evolves during the production process.  Great technology will even announce disparities between those data (e.g. lock vs. loan) and allow you to manage those differences without necessarily having to freeze the loan or take additional steps to fulfill.

The benefits of completely accurate data have never been more necessary than now.  For those of you who survived the market and the government so far, don’t risk it all by forgetting that investors have to survive as well.  They will find any excuse to put a defective loan on your shoulders; with the new RESPA requirements, they have more room to do so.  The other side of that coin is that investors will pay more to those who supply more reliable loans.

Everyone is working on thinning margins in an unpredictable economic and regulatory environment.  Now is the time to control costs, increase time and accuracy to market, and receive investors’ most favorable rates.  True data quality is a great cost-effective way to start.

And as for luck?  Make your own!   As Thomas Jefferson once said, “I’m a great believer in luck and I find the harder I work, the more I have of it.”  It is worth investing in the technology that will make you both good and lucky.

Lloyd Booth is the President of Blueberry Systems, a software development and consulting firm for the financial services industry.