Disaster Recovery

During our reviews this year, we found most mortgage bankers were actually prepared for Covid 19 pandemic.  It was impressive that Companies quickly embraced having employees perform loan manufacturing tasks from home.   Processing, underwriting and even closing tasks were being perform remotely by employees. 

Technology and the cloud have allowed employees to access Loan Origination Systems from remote locations. Tasks are performed no different than if employees worked at an office.   Employees have always been able to communicate with borrowers and department team members by email, phone and even video conferencing if necessary.  The pandemic did not degrade productivity or customer service. 

Most mortgages adjusted to the pandemic and we found few Company’s actual had business disruptions.  However, a pandemic is one of many exogenous events that could disrupt the activities of a mortgage banker.   All mortgage bankers should have a Business Continuity and Disaster Recovery Plan. 

The following are 14 Points to remember when developing the plan. 

  • Who has overall responsibility during a disaster? Who are the back-ups?

  • Disaster recovery is more than just technology. The plan must address the following business issues:
    • Loan originations
    • Loan closings
    • Secondary market commitments and delivers
    • Payroll and human resources
    • The financial strength of the company to withstand temporary and/or protracted interruption of cash flows
    • Insurance coverage for disaster recovery
  • Describe plans for regular testing, at least annually, of the plan.

  • Identify all points of possible failure.

  • Identify all outsourced relationships and dependencies.

  • Identify the recovery site, with possible back-ups. Address the following:
    • Who will gather there?
    • What supplies are needed?
      What communication devices will be brought there or be available there.
      Is there a need for back-up power if utilities are not available?
    • What documents will be there or must be brought there.
      What software and data should be stored there or brought there.
  • Address security at the back-up site, possible law enforcement issues.

  • Name a public relations or media spokesman. Name the back-up.

  • Is there insurance in place for business interruption? Terrorism? Natural disaster. Identify what is included and what is excluded.

  • Identify a contact tree for all employees.

  • Lay out all the exact actions to be taken in the immediate 24 hours after a disaster occurs.

  • Identify decision-making authority with back-up persons.

  • Identify ways in which the plan is disseminated to all employees.

  • Print key data on wallet sized, laminated card, all employees.