Further Automating Compliance

Ncontracts, the leading provider of integrated risk management solutions for the financial services industry, recently acquired QuestSoft Corporation, a leading provider of compliance software and services for the mortgage, bank and credit union industries. Combining Ncontracts with QuestSoft will be transformative for customers and for the industry. The combination creates a powerful end-to-end risk and compliance suite uniquely enabling financial institutions to grow and succeed in the evolving regulatory environment. Leonard Ryan, founder and President of QuestSoft told our editor what’s next for him and the company.

Q: Describe how you first got involved with the world of mortgage lending.

LEONARD RYAN: I became involved in mortgage lending in 1985 because of all the operations at our business accounting firm, the mortgage side had by far the most opportunity. I was a licensed MLO, then co-owned a mortgage company for two years. I ended up leaving the space to focus on software development because I realized I had a talent with automating the origination processes. The company I was with grew from 50 to 900 customers in three years and I trained over 2,000 processors and underwriters in how to replace their typewriters with software during that time.

Q: How has the industry changed since you first entered the mortgage space?

LEONARD RYAN: In 1985 the most efficient way for us to work was to go to the borrower’s homes and take an application in person. The IBM PC had not yet come to market so everything was manual or typewritten. Of course, now we think of our phones, the multiple displays with our computers and all of the graphics when we look at the tremendous changes in the industry. Plus, the ability to transact completely from your home as a borrower and desk or home as a loan originator. Finally, information is so readily available today, and that is accelerating solutions faster than ever before.

Q: QuestSoft has added a digital compliance tool to its Compliance EAGLE platform called LeadER. Describe how the tool works and how lenders will benefit from using it.

LEONARD RYAN: Solutions in the lending compliance world tend to focus on originated loans primarily due to costs. At $5-15 per loan, it has been too expensive to apply all of the federal and state rules along with other areas of compliance to inquiries until you are reasonably assured of funding a loan to pay for the compliance. With LeadER, we started with the premise of asking how could we bring that price down to a point where we could apply these rules in a fully automated mode and simultaneously calculate payment streams, fees, etc. to reduce issues once the inquiry was converted into an application. This new service dramatically improved loan quality by addressing issues earlier in the process, paving the way to reduce time from application to funding.

Q: QuestSoft enhanced its Fair Lending RELIEF offering by adding a new module that allows lenders to analyze non-HMDA consumer lending activity. Why did QuestSoft launch this enhancement and how does it benefit lenders?

LEONARD RYAN: About two-thirds of QuestSoft customers are depositories. Most have some line of business that addresses consumer lending (like auto loans, student loans, credit cards, and unsecured consumer loans). The compliance needs for fair lending are different in that you have to determine race, sex and ethnicity without asking the borrower. Additionally, all regulators have placed renewed emphasis on fair lending with the new Biden administration. It seems we hit the market very well in terms of timing and our customers are really appreciating how this enhancement is helping them navigate through their exams.

Q: What’s next for QuestSoft moving forward?

LEONARD RYAN: Last September our customers responded to a survey that asked that very issue… what do you want next? The feedback was that they love our innovation and customer service but they wanted us to move into the areas of enterprise risk and vendor management. Responding to that need, in December we teamed up with Ncontracts in an acquisition of QuestSoft to pursue that end-to-end compliance offering. You will be hearing about new capabilities that will allow our customers to consolidate compliance vendors into one spot and further reduce the burden and cost of operations in the next month or two. My new role is to develop strategies to make our customer’s dreams a reality. I can’t wait to show what’s next!