We value our partnership with CSS, and I am more than happy to share some thoughts with regard to our strategy of managed vendors for our refinance transactions.
The most important aspect of our goal to utilize only preferred/managed vendors for fulfillment of our refinance transactions hinges on the formal agreements we establish with them to achieve the best possible service for our clients, while mitigating risk to the Bank. The KeyBank due diligence process when onboarding a title and settlement service provider allows all of KeyBank Home Lending’s risk partners to gauge compliance, operational, privacy, etc. risks before execution of the MSA and SOW and full onboarding. As part of the Bank’s ongoing vendor management process, we meet with each preferred provider once monthly to discuss the prior month’s business, discuss performance metrics (SLAs), and to address any adjustments that need to be made on either side to ensure a smooth process for KeyBank clients.
Operationally, KeyBank Home Lending benefits from the managed engagements in many ways. In executing a refinance transaction with a non-preferred provider, we have learned through experience that those “one off” refinance transactions can be problematic from a trailing documentation standpoint, which can lead to issues as it pertains to delivery to the GSEs. Organizations not held accountable to SLAs as they apply to return of documentation, in our experience, are much less likely to act with a sense of urgency.
From a Compliance perspective, we look to mitigate risk that can be associated with a “referral” scenario. We utilize documentation that is only intended for the applicants to complete (generally electronically) if he/she wishes to choose an off the preferred menu of title and settlement service providers. We take this risk very seriously in order to protect the reputation of both the first mortgage LOB and KeyBank alike from the RESPA and UDAAP perspective.
Lastly, KeyBank Home Lending wants to ensure that its clients receive excellent service at a reasonable price. Only preferred/managed vendors are loaded as “white list” vendors that automatically populate when title and settlement fee scenarios are pulled in Closing Corp SmartFees. We generally try to engage with vendors that are able to offer centralized refinance rates, which is of benefit to the client from a cost perspective. For each application, our MLOs access Closing Corp Smartfees to compare and choose those preferred providers that are available to service the refinance transaction. We have configured SmartFees to return the lowest price option in all cases. While an MLO can explore other reasonable options, he/she is trained to match the client with the best value available.
David T. Smith
Mortgage Vendor Manager
Key Bank Home Lending