BECU Easing its HMDA Reporting Headaches with QuestSoft Solution

TUKWILA, Wash. - To Steven Wolf, HMDA is a four-letter word. "It's a big onus," said Wolf, mortgage system administrator at BECU in Seattle. "It is time consuming on all ends. Anything that simplifies the process is extremely valuable." In January 2005 Boeing switched from the Federal Financial Institutions Examination Council's HMDA reporting freeware - a product Wolf describes as "extremely cumbersome" - to QuestSoft Corp.'s HMDA Relief processing software and its add-on Instant Geocoder census tract analyzer. The result: "We're saving weeks, literally man-weeks, every quarter." It's not just a matter of extracting the necessary data from the loan-origination applications needed for the required reports on home-purchase loan, home-improvement loans, and refinancing applications. It's also being able to deal efficiently with missing information and plain old human error. All in all the FFIEC software wasn't up to the task. "We heard about QuestSoft's software from another credit union," Wolf said. "There was another company whose HMDA product we looked at. They gave a presentation. It was slick but monstrously expensive. I was kind of shocked. Then we saw QuestSoft's. It was as good for a fraction of the cost." QuestSoft has about 1,500 customers worldwide, of which some 250 are credit unions. According to Leonard Ryan, president of the Laguna Hills, Calif, company, "Our approach is that we look at everything that can be automated. Instead of looking at every single loan individually, we try to automate as much as we can so there are just the little functions left over that someone has to give personal attention." The result is that HMDA reporting "becomes a fairly clerical function for most companies." Because data integrity is a major issue in HMDA reporting, QuestSoft has forged alliances with 40 makers of loan-origination software products, including FICS, Portellus, Dynatek, Empower!, Pipeline Solutions, and Calyx, making implementation almost intuitive. The user downloads HMDA Relief from the QuestSoft Web site, enters an access code, and is "pretty much up and running," said Ryan. "It's installed like a video game. We have a help system that tells you how to import from all these 40 different loan-origination software packages. It gives instructions on how to do the import from each one of the packages." The QuestSoft software does an edit on the data and produces a listing on the screen of records with errors and what type of errors they are. "For example, that if you have a loan that was cancelled or denied or withdrawn and you've also indicated that the loan has been sold to an investor such as Fannie Mae, it knows that's invalid, that you couldn't have sold," Wolf said. "The advantage of QuestSoft is that if you have a common error across hundreds of records you can do a batch correction." The Instant Geocoder works in conjunction with HMDA Relief, figuring the census tracts for the property addresses - about 33 billion street addresses, updated on a quarterly basis - in the QuestSoft database. "We do business in only seven states," Wolf pointed out. "The bulk of our loans are on the West Coast. You could buy the whole country, which is thousands of dollars, or you could pick regions. We rolled it out for one region. For the few we do in Pennsylvania, Illinois, and Kansas, we don't use Instant Geocoder. The loans usually come in already coded, but what this software does is correct any geo-coding errors. Pretty slick." BECU ported all of its 2004 and 2005 data through HMDA Relief, even re-extracting the data that it had already run through its old reporting program - 20,000 to 25,000 records overall. "You can look at error reports, summary of performance by gender, by race, by ethnicity," said Wolf. "Those are important for HMDA. It's an easy-to-use interface, with a lot of variations on how you can run the reports - I can run them by date, quarterly, monthly, look at all sorts of numbers, summaries. I can't see any downside."