We had the honor of visiting again with Regina Lowrie, CMB, the President and CEO of Dytrix, and one of the industry’s true thought leaders. Here’s what she discussed with our own Jim Paolino.

On the threat of ransomware and cybercrime to the mortgage industry

It’s possible that cybercrime, in general, could top $6 trillion in losses by the time 2021 is over, according to Regina. She noted that many companies have become more vulnerable to cyberattack because of the WFH environment brought about by the ongoing pandemic. Of course, this has made available heavy email traffic among remote locations, opening the doors to opportunistic cybercriminals. This increased risk has not been lost on the insurers faced with footing the bill of cybercrime. Regina has observed a significant increase in the cost of cyber and E&O coverage. 

Jim and Regina also discussed what lenders (and others) need to do to protect against ransomware attacks. Both agreed that recovery from any ransomware attack can be very expensive and arduous. Accordingly, lenders need to increase their remediation of systems…and start by simply get them updated!  Regina surprised us a little by sharing that many lenders she sees in the industry are still working on unsecured systems. 

Still think E&O and CPLs protect you against wire fraud?

Jim and Regina also discussed the ongoing threat of wire fraud. Regina reminded lenders out there that E&O coverage and CPLs generally do not protect businesses from wire fraud. In fact, with the increase of purchase volume, we’ll likely see a wider spread of closing agents involved in mortgage transactions, which creates a challenge for lenders who need to vet and oversee those agents. Jim and Regina briefly discussed the new partnership between LodeStar and Dytrix. One of Dytrix primary services is to vet and qualify closing agents, managing the risk so that lenders working with them don’t have to.  That evaluation includes assessing the vulnerability of a closing agent to things like wire fraud.

The coming of the purchase cycle. 

For lenders, Regina said, a purchase market means an increase in cost and effort put toward the vendor approval process. Of course, cyber security risks also tend to increase in a purchase market.

It’s fairly typical for lenders to look to expand market share to keep volume high as well as finding ways to reduce margins to compete. According to Regina, this creates a bit of a feeding frenzy: lender “scans Scotsman Guide Top 100 L.O.s;” lender steals/recruits best L.O.s from other lenders; lender pays huge signing bonuses to recruits; lender seeks other ways to cut costs. As Regina remarked, “ We shouldn’t do it, but we do.”

Jim and Regina agreed that lenders need to keep looking for digital solutions to help productivity and performance. But then again, you can lead a horse to water…

Regina said that, most likely, it will take rising rates to break the cycle of ramping up/paring back.

Jim pointed out a similar cycle—during refinance booms some lenders are too busy to invest in more effective, productive systems. But those same lenders seem to lack the liquid for tech investment in lower volume purchase markets! 

It’s conference season…sort of. COVID-induced changes.

Regina sees one of the major impacts of the pandemic to be less one-on-one travel to see single customers, even after the all-clear is finally given someday. However, she agreed with Jim that conference season in the fall of 20211 should be interesting, with live (at the time of the recording) events going forward from MBA, Eastern MBA and several more. 

Is the mortgage industry becoming more diverse?

Jim and Regina revisited the topic of diversity and inclusion, which they broached during their conversation in 2020. According to Regina, the industry has made great strides on that front. She praised, in particular, MBA’s efforts, making mention of the MPower event in particular.