ComplianceEase Releases Updated Tools and Technology to Help the Mortgage Industry Comply with New RESPA Rules

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A new release of ComplianceAnalyzer®, online training and webinars help lenders prepare in advance for forthcoming changes.

With something as complex as these new RESPA disclosures, you need to combine intelligent technology with good policies and procedures and a solid understanding of the rules.

ComplianceEase®, the nation’s leading provider of mortgage compliance and risk management solutions, announced today the release of a new version of its leading automated compliance system (ACS) ComplianceAnalyzer®, which now supports the new consumer disclosures mandated under the Real Estate Settlement Procedures Act (RESPA) and regulated by the U.S. Department of Housing and Urban Development (HUD). Sweeping changes to the RESPA disclosures – the most significant in more than 30 years – affect nearly every residential mortgage made in the country and compliance is mandatory starting January 1, 2010.

The massive reform affects two key disclosures that borrowers receive in the process of getting a mortgage, forms known as the Good Faith Estimate (GFE) and the Settlement Statement (HUD-1/1A). Among the more significant changes on the forms is the way that fees must be disclosed to borrowers. The changes are intended to help consumers obtain more meaningful and accurate estimates of closing costs and use the information to shop for mortgages. Instead of listing multiple line-item fees for most services, lenders must now provide borrowers with lump-sum totals of fees. These new so-called “aggregate fees” have more consumer-friendly names like “Our Origination Charge” and “Your Credit or Charge” but the process of migrating to the new forms has not been quite so friendly to the mortgage industry. For example, many state laws will still require lenders to keep track of the line-item components of the new “aggregate fees”, and use those “component fees” to check whether the lender is in compliance with fee restrictions. In the new version of ComplianceAnalyzer released today, lenders can provide “aggregate fees” along with the “component fees” when they audit loans for compliance, and the system will automatically determine, depending on the property location, how the fees should be treated under applicable state laws and regulations.

Jason Roth, senior vice president of product development at ComplianceEase, explained, “We have been planning our support for the new RESPA requirements since the beginning of 2009. It was an extensive project that required us to make changes to the compliance tests for more than 100 different federal and state laws and regulations. We decided to put in the extra time necessary to enable lenders to provide the loan information they have available, whether they have only the aggregate fees or all of the component fees as well, and know that they will get an accurate compliance audit of the loan terms, from federal requirements all the way down to state and municipal levels. This includes not just high-cost lending laws but all of the states’ prohibited and restricted fees requirements as well.”

The ComplianceAnalyzer ACS is integrated with more than 30 different mortgage industry technology and service provider platforms. To help ease the transition to the new RESPA disclosures, ComplianceEase also announced that existing integrations would be backward compatible for several months, with ComplianceAnalyzer automatically determining how to handle fees that are submitted for compliance audits, even if platforms couldn’t be updated in time for the January 1 deadline. The extra transition time is likely to provide a much-needed break for an industry that has been working frantically to make their final preparations.

In fact, in a poll conducted during ComplianceEase’s December 10th online webinar entitled “Ensuring a Solid Foundation for RESPA Compliance In 2010”, with barely three weeks to spare, fewer than 15% of respondents indicated that they were completely ready for the January deadline. ComplianceAnalyzer will also continue to support auditing loans that use the legacy RESPA disclosures that will be phased out starting in January. This means that secondary market investors, rating agencies and regulators will be able to audit older loans for compliance alongside newer ones, with no loss in functionality.

Donald Lampe, attorney at Womble Carlyle Sandridge & Rice, PLLC and panelist on the December 10th webinar, added, “With something as complex as these new RESPA disclosures, you need to combine intelligent technology with good policies and procedures and a solid understanding of the rules. If you’re missing one of those pieces you may run into trouble now. ComplianceEase provides not only the technology but also access to resources and education so that the industry can have a complete picture of how they’re going to comply.”

With the new RESPA rules on the top of the industry’s mind it was no surprise that ComplianceEase saw record attendance at its December 10th RESPA webinar. More than 2,000 attendees signed on to hear representatives from HUD as well as compliance and technology experts provide last-minute guidance on how to comply with the new requirements. A recording of the 90 minute webinar was also made available for replay at the company’s website, ComplianceEase.com, for those who could not attend. There was so much interest in further RESPA training that the company added a follow-up online workshop, which will take place on December 15th. The training sessions coincide with ComplianceEase’s mission to go beyond simply providing technology by also offering the education the mortgage industry needs in order to implement compliant policies and procedures and to make the best use of technology in their operations.

About ComplianceEase
ComplianceEase, a division of LogicEase Solutions Inc., headquartered in the San Francisco Bay Area, is a premier provider of intelligent business solutions to the financial services industry. ComplianceEase's patented platform includes ComplianceAnalyzer – the mortgage industry's leading automated compliance solution. ComplianceEase combines industry and regulatory compliance expertise with innovative technology to power beginning-to-end solutions in a fraction of the time and for a fraction of the cost of traditional approaches, while providing high levels of accuracy and integrity. ComplianceEase's significant and growing client base includes four of the top five mortgage lenders in the nation, and over 400 financial institutions, service providers, law firms, and regulators. Managed by a team of highly experienced and innovative mortgage professionals, the company is funded by the First American Corporation, the WI Harper Group, and the senior management team. For more information visit ComplianceEase.com.

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