Kaan Etem, Author at Cogent QC: Award-Winning Loan Quality Control & Compliance Software

Automating Workflows

March 29, 2018 By Kaan Etem

The mortgage QC sector has evolved to the point where most system providers automate the basic workflows in one way or another: import loan record data, sample loans, conduct audits, reverify documentation, send feedback to business units in the field, resolve findings, and generate reports.

These aspects of the quality control process are well-honed and mature, so it’s comparatively easy to build systems and interfaces to manage them. The question is, what happens when you introduce different workflows, new workflows, or even new audit types?

Cogent’s system architecture, development staff and business model are aligned around helping lenders customize and automate their workflows and integrate them with other workflows in the organization.

If you’d like to hear about how we’ve helped our clients automate their processes, call us or email us at the coordinates at the top of the page. We’re happy to share.

Accuracy, Precision – and Neither

February 2, 2018 By Kaan Etem

A biologist, a chemist, and a statistician are out hunting. The biologist shoots at a deer and misses five feet to the left. The chemist takes a shot and misses five feet to the right. The statistician yells “We got ’em!”

Controversy at the Consumer Financial Protection Bureau

November 29, 2017 By Kaan Etem

In an extraordinary turn of events, “the leadership of the Consumer Financial Protection Bureau has been in controversy since last Friday when outgoing Director, Richard Cordray, and President Trump designated dueling individuals to serve as acting Director of the Bureau following Cordray’s resignation”, to quote Mitch Kider of the law firm Weiner, Brodsky and Kider. This situation presents some interesting dilemmas for compliance and quality control professionals, many of which are described by Mr. Kider in a Special Alert. The Alert provides a synopsis of the situation and its implications and is well worth reading in full right here. The industry is watching closely as the drama unfolds!

Are Your Data and Operations Safe?

May 23, 2017 By Kaan Etem

One of our favorite newsletters, published by mortgage industry veterans of 30+ years’ standing, is the Garrett McAuley Report, a no-nonsense look at some of the issues percolating in the industry. The latest edition mentions the relevance to our industry of the recent ransomware attacks that affected most major countries in the world . Here’s their take. How are you positioned for this eventuality?

For more along the same lines, check out their Articles page.

May 21, 2017

To Our Clients, Colleagues, and Friends:

Everyone has heard about the ransomware attacks last week, and our impression is that very few independent mortgage companies are prepared for this sort of thing. About 70-75% of our clients use Ellie Mae’s Encompass, and when we ask about the security of their loan files, the answer is usually along the lines of, “Not a problem. Encompass is hosted.” True but irrelevant if cyber-attacks take down Ellie Mae and you don’t have back-up. Do yourself a big favor and start thinking through all the ways you need to protect yourself.
Think about all the vendors you do business with, and think about how their sudden failure would affect you. As improbable as it seems, what if Ellie Mae failed, or your hedge advisor, or your biggest investor? I asked one mortgage executive how his company would be affected if Encompass made an announcement that they were immediately ceasing all operations. He laughed and said that could never happen, but people also said that about Lehman, Bear Stearns, New Century, and WaMu. I once met a fellow from Chicago, his last name was Kelly, who owned a bunch of banks. Back around 2005 or so, they bought preferred stock issued by Fannie Mae, and that was when Fannie Mae was considered A+ solid. When Fannie Mae was placed into conservatorship, the securities plunged in value, and the FDIC seized all 5 or 6 of his banks.Anyway, I’d say that 90% of our clients don’t do adequate due diligence on their counterparties, and there’s real risk there. Here’s a 13-page guide, Outsourcing Risk, put out by the Federal Reserve on managing counterparty risk, with an emphasis on outsourcing.

Lines of Defense

August 26, 2015 By Kaan Etem

Here’s a good description of the ‘lines of defense’ approach that many financial institutions are taking to quality control, operational risk management and compliance risk management. Without a framework like this, it becomes much more difficult to meet today’s enhanced regulatory scrutiny, increasingly complex regulatory requirements and rapid pace of regulatory change.