Tanya Brennan of DocMagic provides insightful information on TRID and UCD readiness, and discusses how SmartCLOSE™, the company’s Collaborative Closing Portal, effectively addresses both TRID and the new UCD requirements.
Join Tanya Brennan, DocMagic's eService Product Specialist, for a FREE educational webinar.
Learn what you need to know to prepare for the Uniform Closing Dataset (UCD) Requirement before the September 25, 2017 deadline. Our special guests Daniel Miller, Digital Alliance Manager & Sejal Patel, Financial Service Manager from the Single Family Digital Products division at Fannie Mae will be on hand to answer your questions about UCD.
We'll show you DocMagic's GSE-Verified solution — available NOW! Learn how to generate & deliver UCD files directly to Fannie Mae and/or Freddie Mac, satisfy the requirement to provide borrower data (and seller data, if available) in the UCD file format, create UCD files that include an embedded PDF of the Closing Disclosure, and how to integrate via DocMagic's Application Programming Interface (API).
Join us for a Free DocMagic Webinar: Get Prepared for the UCD Requirement! Join our own Tim Anderson, Director of eServices, along with Kathy Scanlon, Lead Project Manager – UCD / Loan Closing Advisor at Freddie Mac, for a FREE educational webinar! Learn what you need to know to prepare for the Uniform Closing Dataset (UCD) Requirement before the September 25, 2017 deadline.
Find out what you need to know about the UCD requirement and step-by-step instructions for how to:
We'll show you DocMagic's GSE-Certified solution — available NOW!
Press Release:
Company’s dual certifications enable lenders to fulfill GSEs’ recommendations of advanced preparation and testing for both 2017 and 2018 UCD delivery deadlines
TORRANCE, Calif., June 21, 2017 (SEND2PRESS NEWSWIRE) — DocMagic, Inc., the mortgage industry’s leading provider of document production, automated compliance and comprehensive eMortgage services, announced that its technologies are now capable of supporting both phases of the upcoming UCD (Uniform Closing Dataset) requirement.
The company’s technology solutions, which have been certified by Fannie Mae and Freddie Mac for both phases of the UCD file delivery mandate, enable lenders to start immediate testing of full UCD delivery – well in advance of the phase one 2017 deadline and the phase two 2018 deadline – as has been recommended by both GSEs.
The Uniform Closing Dataset (UCD) is a common industry dataset that allows information on the Consumer Financial Protection Bureau’s (CFPB’s) Closing Disclosure to be communicated electronically.
On September 25, 2017, the GSEs will require lenders to deliver borrower data and the Closing Disclosure in the UCD file. Later, in 2018, the second phase of the mandate will require seller data to be included as well. However, according to a joint statement issued by the GSEs, both Fannie Mae and Freddie Mac are recommending that lenders start to “submit files with both Borrower and Seller data, if available, in order to test their processes and become familiar with the messaging from each GSE’s collection system.”
DocMagic’s technology solutions allow lenders to fulfill the GSEs’ recommendation by generating and compliantly delivering UCD files that include both borrower and seller data to the GSEs. DocMagic can also accept UCD XML data from third parties and deliver it to the GSEs. In addition, the company offers an API for direct, seamless connection to the GSEs’ technologies.
“At DocMagic we went above and beyond attaining the initial GSE UCD certification because we want our customers to have the option to implement the GSE-recommended testing, which allows them to implement phase two requirements now,” says Tim Anderson, director of eServices at DocMagic. “Phase one addresses the XML file for the borrower CD and associated data, but the GSEs have definitively recommended that lenders complete everything before the phase one September 25, 2017 deadline. We find that lenders that are serious about sustained profitability and growth tend to follow GSE recommendations and take action ahead of time. Now with DocMagic, all of our lender clients have that option.”
To assist lender clients in preparing to meet the entire UCD mandate, DocMagic recently launched its ‘UCD Control Center,’ a one-stop, go-to resource for everything lenders need to know about the UCD requirement. It offers tools, documentation, interactive communication for Q&A, webinars, updates, and most importantly the ability for lenders to test for the entire UCD mandate ahead of the complete 2018 deadline.
The company says its goal is to have the bulk of its clients fully prepared to meet the requirements for both phases this year.
“Our customers and partners rely on us to do everything we can to assure they transact the safest, most compliant loans—and helping them prepare for a major new mandate like the UCD requirement is no different,” said Dominic Iannitti, CEO of DocMagic. “Lenders, settlement providers and other organizations must prepare now or run the precarious risk of being unable to sell their loans. DocMagic is proud to be leading the way, yet again, to help them avert these costly risks.”
About DocMagic:
DocMagic, Inc. is the leading provider of fully-compliant loan document preparation, regulatory compliance, eSign, eDelivery and comprehensive eMortgage services for the mortgage industry. Founded in 1988 and headquartered in Torrance, Calif., DocMagic, Inc. develops software, mobile apps, processes and web-based systems for the production and delivery of compliant loan document packages. The company’s compliance experts and in-house legal staff consistently monitor legal and regulatory changes at both the federal and state levels to ensure accuracy.
For more information on DocMagic, visit http://www.docmagic.com/.
By Brian Hornea
Cybersecurity has become an increasingly pressing issue in all industries that store personal information, particularly after a cyber-attack in 2014 against JPMorgan Chase that compromised some 83 million accounts.
Protecting data has become a larger concern to mortg
age professionals in recent years as the industry has become more and more digitized—many mortgage loans now are completed electronically to where no paperwork is involved at all. On top of that, mortgage lenders collect more personal information on customers than any other sector in the financial services industry, making them prime targets for hackers.Digital data security came to the forefront again this week as the CFPB made an announcementthat it is seeking input from stakeholders on consumer access to their personal financial data—particularly, how much access consumers have to that data and how secure the data is when it is being shared.
As digital data is becoming more difficult to protect—after all, the CFPB’s Office of Inspector General listed information security as one of the Bureau’s biggest challenges—companies that handle sensitive information are going to great lengths and expense to make sure that data is safe.
“Our IT’s department’s No. 1 priority is protecting data,” said Mark Mackey, CEO of International Document Systems. “You wouldn’t risk security for anything. It wasn’t as big of a deal 10 years ago because you didn’t hear about it as much.”
Mackey continued, “We try to put in as much security as we can from all sides. We put a lot of safeguards in place. Everything that can be encrypted is encrypted. We have to take everything to the extreme, unfortunately.”
DocMagic CEO Dominic Iannitti said of his company's security procedures, “DocMagic employs a multifaceted defense in depth approach to ensuring customer sensitive data is always protected. Multiple next generation firewalls are used to keep out unwanted traffic and intruders. Additionally, an intrusion detection and prevention system is used to analyze traffic and alert network security personnel of suspicious activity. Advanced encryption is used when data is transmitted to or from DocMagic servers. Secure Document Delivery to partners and third-party providers is provided through the WebDocs platform. This system utilizes a secure combination code along with a client configured challenge password that is entered prior to downloading documents.”
James Deitch, CEO of Teraverde Management Advisors, noted to MReport earlier this year that it has gotten easier for hackers: “They are usually invited in by having an employee click on an email that has an attachment or go to a website which has malware contained on it. And that malware can be downloaded onto a machine simply by browsing on the website.”
Should a data breach occur, Deitch said, “The first item is to do a pretty broad risk assessment and just understand what the risk elements to the company are. One can do a social engineering susceptibility test that are fairly straightforward. They can either be done by the company or independently. The second is just to go through what is called ‘patch management,’ just to make sure that all the updates on software, servers, or computers are all done. And to train employees on the techniques that hackers use to get in.”
This article originally appeared on the MReport Blog on November 17, 2016.
Press Release:
Fully TRID-compliant solution delivers superior service and a competitive advantage
TORRANCE, Calif., Sept. 29, 2016—DocMagic, Inc., the premier provider of fully-compliant loan document preparation, compliance, eSign and eDelivery solutions, announced that Corporate Settlement Solutions (CSS), a title and settlement services company, has successfully implemented DocMagic’s Total eClose™ solution.As a result, CSS can offer a completely new customer experience, gain a competitive advantage, and remain 100 percent TRID compliant at all times.
“We recognized early on that in order to differentiate ourselves from a crowded marketplace, it was paramount to offer elevated service to our clients,” said Jerome Jelinek, CEO and general counsel at CSS. “With the addition of DocMagic’s Total eClose, we offer lenders the opportunity to transform their mortgage origination process through the elimination of paper, thereby significantly reducing costs and increasing efficiencies.”
CSS combined DocMagic’s functionality, services and integrations into a single offering to create an easy-to-use, out-of-the-box eClosing solution. DocMagic’s Total eClose functionality unites eNote, eSignature, eNotary, MERS eRegistration, eDelivery, and eVault services to provide a highly-efficient, paperless end-to-end eClosing. In addition, documents that need to be notarized can be conveniently eSigned and eNotarized without leaving the comfort of their home.
“We are excited that CSS is successfully leveraging our Total eClose solution to provide a completely electronic closing process for their customers,” said Dominic Iannitti, president and CEO of DocMagic. “As a settlement service provider, it is impressive that CSS has taken a leading role in promoting the benefits of eClosings and as an early adopter, they will enjoy a significant advantage over their competitors.”
After the introduction of TRID and its increased liability for lenders and their assignees, if you originate, sell, buy or service loans, you must be able to demonstrate TRID compliance years after a loan closes. DocMagic’s system provides electronic proof and evidence of compliant transactions for future audits with a date and time stamp audit trail of everyone who has touched the transaction at any level. From the original loan application and Loan Estimate (LE) to receipt of delivery of the final Closing Disclosure (CD), data, calcs and documents are stored in an eVault to provide the ability to replicate proof of compliance.
With TRID’s increased compliance requirements and soon the implementation of the new Uniform Closing Dataset (UCD) requirement, the future is in fully-electronic transactions that help lenders meet strict timing requirements and provide the ability to fully recreate all compliance checks at every point in the transaction. The CFPB and industry experts agree that it’s better to adopt and implement the technology and processes to make eClosings a reality now as opposed to later.
About DocMagic
DocMagic, Inc. is the leading provider of fully-compliant loan document preparation, compliance, eSign and eDelivery solutions for the mortgage industry. Founded in 1988 and headquartered in Torrance, Calif., DocMagic, Inc. develops software, mobile apps, processes and web-based systems for the production and delivery of compliant loan document packages. The company’s compliance experts and in-house legal staff consistently monitor legal and regulatory changes at both the federal and state levels to ensure accuracy. For more information on DocMagic, visit www.docmagic.com.
About CSS
Corporate Settlement Solutions (CSS) is a dynamic, forward-thinking group of real estate settlement service professionals with a focused passion for providing a superior customer experience. The company started as a local title agency in northwest Michigan in 1992. CSS’ growth fostered expansion into a regional vendor management company offering a full range of title, closing, valuation, flood, and recording products. The company offers powerful title software for accurate and efficient
title and settlement transactions as well as an and-to-end eClosing solution. For more information, go to www.visitcss.com.
Industry experts weigh in on recent changes to Fannie Form 1003/Fredie Form 67.
By Patrick Barnard
In the first update for the form in more than 20 years, government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac have redesigned the Uniform Residential Loan Application (URLA – Fannie Form 1003/Freddie Form 67) in order to make it simpler to use and to add new data fields for increased reporting under the Home Mortgage Disclosure Act (HMDA).
The new version includes simplified terminology and a clearer set of instructions for users, according to the GSEs. This, in turn, will help borrowers complete the loan application with less help from the lender. As part of the project, the GSEs worked together to create a common corresponding data set, called the Uniform Loan Application Dataset (ULAD), to ensure consistency of data delivery.
Lenders may begin using the redesigned forms on Jan. 1, 2018; however, as of right now, there is no deadline set for their required use.
The updating of the form is part of the GSEs’ Uniform Mortgage Data Program (UMDP), a larger joint initiative under the direction of the Federal Housing Finance Agency (FHFA), to standardize single-family mortgage data in the U.S.
Although at first glance these updates might not seem like a big deal, they are, in fact, an important step toward standardizing the loan information used for underwriting single-family mortgages. To learn more about how the industry is viewing these changes, MortgageOrb recently interviewed Tim Anderson, director of e-services for DocMagic, a provider of loan document software and services; Mike Vitali, senior vice president and chief compliance officer at LoanLogics, a provider of technology and outsourced audit services; and Annemaria Allen, CEO and president of The Compliance Group, a consultancy that assists lenders with mortgage compliance and quality control (QC).
Q: What is your initial reaction to the changes? Do you feel the changes were necessary? Are there some changes that you feel were more needed than others?
Anderson: These changes were needed. With the new TILA-RESPA Integrated Disclosure (TRID) forms (the loan estimate and the closing disclosure), it’s good to try and standardize them as much as possible to have the same look and feel to them for the consumer. I still wish they would have moved to a full intelligent, or, as some refer to them, SMARTDoc, format so that only the exact terms specific to the loan would be shown. They did incorporate the idea of a “dynamic” document, so if a consumer is filling out the form online, some of it expands or contracts based on some of the loan types and conditions. It should be the same if one is printing and filling it out manually, producing less data and fewer pages that are not relevant.
Vitali: I believe the changes will prove beneficial to both lenders and consumers. The additional information will help lenders make an earlier, more informed decision on borrower qualifications and whether they should proceed with the processing of the loan. They will also be in a better position to explain what additional information may be needed and why. With the increased scrutiny on loan quality and customer service, the need for more comprehensive borrower information became more important. The added data will also provide a more complete picture of the applicant – which may assist lenders and the agencies in making better determinations about risk factors that can lead to borrower defaults.
Allen: Let’s just say that we have been using basically the same URLA for the past 30 years, with very few to moderate changes. So, yes, I feel the current URLA needs a complete update. Times have changed, and laws have changed, so my initial reaction to the changes is that, for the most part, they are good. From a compliance standpoint, of course the HMDA changes are needed. The URLA is the primary form in which we collect all of our data. It tells us the story we need to know about the borrower. The better documented the story is, the faster it speeds up the lending process. I have some concerns with documenting co-borrowers’/joint credit and perhaps some inconsistencies there, but it could be a product of looking at the same form for 30 years and then trying to review this new form to determine how certain aspects apply. Generally, after several months of using the form, it all starts falling into place. I would suspect that there would be a need for an amended version about a year after the form comes out.
Q: Do you feel that the form is “clearer” and will be easier to use, as the FHFA says? Are the instructions clearer?
Anderson: Yes. I like the idea that they separated the borrower information from the lender so there will be less confusion on who fills out what. They also used the same company that designed the TRID documents – and so leveraged some of the consumer feedback they received from that to include in the new URLA. Yes, the instructions are clearer. They used more simplified consumer language than business loan officers (LOs).
Vitali: Definitely. The form is like a road map for originators or consumers who are providing lenders with the information needed to move forward with their loan applications. It will also highlight areas that may need additional research or information.
Allen: There are parts that are definitely clearer, but then there are parts that are more confusing. For example, Sections 3a and 3b were a bit more confusing for me. For example, Section 3 asks the borrower to list all properties owned and what is owed on them, but in Section 3a, it only gives one spot for one address. Then it says, if you are refinancing, list the property you are refinancing first – well, there is only one spot, so it doesn’t really matter. Then you go to 3b, which is where you would put any additional property, but again, it only provides one spot for one address. What about the borrower who owns multiple properties? As I looked at it several times, it became clearer, but the flow was a bit awkward. I thought providing the borrower with details for each section was helpful, such as listing income from other sources and the assets section.
Q: What do you think were the main reasons why the FHFA sought to update the form at this time?
Anderson: It is a continuation of the UMDP that started with the mortgage appraisal form and the Uniform Appraisal Dataset and expanding it to other critical documents to ensure more transparency and better loan quality to feed its underwriting and decisioning systems. Fannie and Freddie have announced their new pre-closing QC systems that will eventually replace Loan Prospector and Desktop Underwriter, and it just makes sense if you are collecting more data sooner, lenders can focus on making good loans and spend less time and money on ones they know they cannot approve later.
Vitali: Increased data on loan applicants is a big part of it. Information is king. In the world of “big data,” the more information a company has about its customer, the better it can serve that person and analyze its risks at the same time. The more detailed information gathered on loan applicants the better. Once collected, this information can then be sliced and diced in a variety of ways to gain a much better understanding of consumers, lenders and the potential for risk in future lending.
Q: What segments or positions do you feel will be most impacted by the changes?
Anderson: Obviously, loan origination, but the expanded data requirements will also have a positive effect on better underwriting.
Vitali: Loan originators will be the first ones impacted. The new URLA requires LOs to ask more questions and gather much more detailed information. However, this should help the better LOs make a quicker decision on whether they should pursue the applications or cut bait. Although this will, at first, increase the work and time involved in taking the initial application, in the long run, it will save valuable time for everyone, including the consumer.
Q: Do you anticipate that these changes will require system upgrades? And if so, do you think those changes will be minor or major (disruptive) in nature?
Anderson: Yes, moving to a MISMO 3.4 format. The Uniform Closing Dataset scheduled for the third quarter of next year will be the next big step to get them there. Whether this will be disruptive depends. With TRID, many loan origination systems could not support the new MISMO 3.3 data requirements, so moving from the previous 2x versions to a new 3x standard was a big effort and leap for most. But once they got there, adding the data elements is really not a big task going forward.
Vitali: The layout and information on the new forms will require system upgrades. There is more information, and it’s in a brand new format. That requires changes. Each data point must also be mapped to meet the MISMO coding for the required electronic reporting of all of the data to the agencies. One change that may require some additional programming is the required use of a separate URLA for each applicant when multiple applicants are involved. This will require the capability to gather the information for each on a separate form while combining and aggregating common data and separating other information that is unique to each applicant. However, I believe technology providers can handle these changes, as the information is uniform throughout.
Allen: Yes, system upgrades – in fact, major system upgrades – and yes, disruptive. As I said, the URLA hasn’t changed in years. There are so many components tied within the application that certain changes will affect other areas, and sometimes you don’t even realize they will affect another area until they do. The application is the heart of the loan process, so our industry is literally having a heart transplant. But just like with a heart transplant – does anyone really want one? No, but they have them because the oxygen starts flowing better, the blood starts circulating through the arteries better, and once you heal, you feel amazing. I do feel the URLA needed an overdue update, but with anything in our industry, it’s never easy. Hopefully, with technology becoming more and more ingrained in our industry, change won’t be as difficult down the road. Keep in mind, though, there will always be updates and patches – it’s a work in progress.
Q: Lenders can start using the redesigned URLA on Jan. 1, 2018. A timeline for required use of the redesigned URLA and ULAD will be established at a later date. What will your company be doing to prepare for the use of these forms, and how soon do you expect to get started?
Anderson: As opposed to most doc-prep companies that based their technology on producing dumb PDFs, DocMagic’s system is based on native XML data to generate “intelligent forms.” As one of the largest doc-prep companies in the industry, we were one of the companies they asked to participate in their original testing and rollout to get valuable feedback. So, we will be ready.
Vitali: LoanLogics, a provider of technology and outsourced audit services for lenders, is now in the process of reviewing any changes needed to extract and process the data that will be captured by lenders in the new URLA. This data will be utilized to analyze and audit loans in pre- and post-closing reviews for credit underwriting and compliance. This additional information facilitates a more comprehensive loan review that helps to better identify weaknesses in the process or information gathering that could lead to loan defects or, worse, repurchases or indemnifications. The information gathered and entered into the new URLA is validated and compared with other loan documentation to ensure it is more accurate.
This article originally appeared on the MortgageOrb Blog on September 7, 2016.
New CFPB compliance requirements mandate that it's time for 'e.'
By Tim Anderson
Back in 2002, when Fannie Mae said it would begin buying this thing called a MISMO category one SMART-Doc e-note, some in the industry thought, “If Fannie Mae is mandating it, the world will quickly embrace it.”
Boy, were those people wrong.
Fast forward to today, and so far, there have been more than 339,456 e-notes registered on MERS. Fifteen years after the Uniform Electronic Transactions Act and E-SIGN Act passed, which created legal acceptance that an e-signed electronic document is as legal as a wet-ink-signed paper one, it appears that adoption is finally going to happen.
Think, for a moment, about some of the headlines that have recently hit the mortgage press: “Goldman Sachs Resolves U.S. Mortgage Probe for $5.1 Billion”; “Wells Fargo Admits Deception in $1.2 Billion Mortgage Accord”; and “UBS Blamed in U.S. Trial for $2.1 Billion in Mortgage Bond Losses.” At last count, the penalties and fines in the mortgage meltdown aftermath are an estimated $110 billion and counting. Some servicers are continuing to pay because they have not fundamentally changed their processes - and now, they are going after the rating agencies, too.
If you saw the movie “The Big Short,” you know it’s about how a few smart guys who, with a bit of luck, accurately predicted the mortgage meltdown and shorted key companies’ stocks that were financing it when it hit. It made them millionaires. Thousands of others were oblivious, and when the music stopped, many were caught holding the bag, or in the case of the mortgage meltdown, bad loans that had flooded the market.
Now, with the advent of the Dodd- Frank Act and the Consumer Financial Protection Bureau (CFPB), new regs are in place to hopefully prevent this scenario from ever occurring again. Meanwhile, the industry is facing a huge problem in that it is failing to fully embrace technology and automation and is still clinging to manual, paper-based processes.
Ostrich head in the sand response
One would have thought that with the National Mortgage Servicing Settlement’s requiring the largest servicers to pony up more than $25 million in assistance money and an estimated $110 billion-plus in additional fines and fees paid out since then, it would have facilitated the rush to automate and eliminate the paper cost and risk of robo-signing documents - but it didn’t. Instead, most still took the traditional approach of throwing more people and paper at the problem in hopes that it would eventually go away. But the CFPB’s new “Know Before You Owe” rule - also known as the TILA-RESPA Integrated Disclosures (TRID) rule - dictating new delivery requirements and tracking of consumer disclosures, is finally driving the industry to automate and adopt “e.”
A new age of compliance
It’s no longer just about generating “dumb” docs and placing them in a paper file to document compliance. The new regs dictate changes in workflow and relationships and being able to verify that a lender did what it said it did - all along the mortgage manufacturing process. The other requirement of generating a MISMO 3.3 data file - and soon, the Uniform Closing Dataset, so any company can electronically board and verify compliance of the data - is another key change and requirement driving a total paperless process.
Forms are not data
Most look at documents as an event in time rather than a process over time. As “Know Before You Owe” became effective, almost everyone in the industry myopically focused on the closing disclosure, as it needed to be delivered three days prior to the closing. Much like the issue with the government-sponsored enterprises’ (GSEs) singular focus on the e-note as the only document that needed to be executed in an e- closing, it’s easy to overlook that there are more documents in the closing package than these two forms. Soon (much like RESPA 2010 with the TILA calculations), everyone was building some sort of closing collaboration tool to integrate the lender’s loan origination system (LOS) to the title system in order to get the fees right. They soon discovered that the reg really started at the time of application with the initial loan estimate form. So, the portals were expanded to handle this, but still, most do not automatically check for compliance, nor do they “rep and warrant” the calculations or documents.
Fannie and Freddie are leading the way
With the Uniform Mortgage Data Programs (UMDPs), and now, with the new quality control systems, Fan- nie and Freddie recently announced that they are moving their traditional post-closing, pre-funding reviews to a pre-closing review in which the work- flow is greatly enhanced to fix the problem before a close rather than attempting to go back upstream to fix it once a loan has closed.
And with Richard Cordray, direc- tor of the CFPB, declaring that the e-closing is his No. 1 signature initiative, it’s easy to assume that this will push the trend further. The requirement of proving receipt of deliv- ery of the three-day delivery rule alone should be reason enough to go “e.”
Processing at the speed of light
Quicken Loans created a big stir with the introduction of its Rocket Mortgage, a completely online, automated, paperless mortgage application process that enables a consumer to prequalify for a loan in less than eight minutes. This proves that mort- gage applications can be swiftly and electronically verified for compliance - and that the entire front end of the process can be automated. Instead of requiring borrowers to scan and up- load key mortgage documents as PDFs, things such as employment, income and assets can be automatically verified through integrations with various systems of record, thus greatly expediting the process and ensuring greater data and document integrity. Once again, Fannie and Freddie led the way with their UMDPs. They also created the Uniform Appraisal Dataset to be compatible with the MISMO 2.4 data format so that appraisals could be electronically verified for compliance via the Uniform Collateral Data Portals.
Electronic vault and audit trail
In the new data-driven world, the ability to track not only when a docu- ment was delivered, but also what the data payload in it was all along the mortgage process, will be crucial to providing a defensible position on the accuracy of the disclosure for future CFPB compliance audits or if anyone else contests the legality of the loan over time.
The beautiful thing about an e- mortgage is that one stores not only the document (legal view), but also the data and date stamp of when the document was created and sent, pro- viding a historical record of events that can be played back like a video for proof of compliance. Because the new documents are “intelligent,” the ability to verify compliance of the data within the document provides irre- futable proof of compliance.
TRID also requires lenders to track and document many delivery milestones. From the original loan es- timate, to intent to proceed, to change of circumstances, to three- day delivery and receipt of delivery verification of the final closing disclo- sure, this should not be a separate system or process from the rest of a lender’s compliance verification pro- cess. The ability to capture the source XML data and the document, along with a date and time stamp of the event, is what the e-vault is really all about. This is really what the CF- PB was thinking when it mandated that the lender implement a compli- ance management system (CMS) to document compliance all along the mortgage manufacturing process.
The minimum file retention of the closing disclosure is five years. A lender might as well keep copies of everything else to document overall compliance.
No more passing the ‘hot potato’
One other critical requirement of TRID is that everyone who owns the asset must verify compliance, as well. If one originates, sells, buys or servic- es the loan and doesn’t verify compli- ance, then one is at risk, as the CFPB is coming after everyone to ensure full compliance of the loan file.
To that end, our firm is now get- ting requests from investors to in- clude copies of both the original loan estimate and final closing disclosure, along with the closing documents. But again, that is not near enough to prove compliance of the loan file and process with TRID.
Online is where the consumer is
Even if one is still not convinced that an e-mortgage process is superi- or from an efficiency and compliance perspective, one can no longer ignore that in order to do business today, one must go online to capture the consumer. Today’s millennials prefer to start and stay online to complete the mortgage process. They don’t want to have to physically drive to an office and sign a bunch of paper documents. Handling the process face-to- face is totally foreign to them. It’s so much more convenient to send a mobile notary to e-notarize and execute the final remaining documents, with all of the others being executed four to five days prior online in the com- fort of one’s own home. Reducing the actual closing to a 10-minute process is the way to do business with this wave of consumers who are increas- ingly gaining buying power each year.
Did the industry not learn anything from the mortgage meltdown? Billions were spent in fines and fees be- cause lenders could not document what they had done. Many key docu- ments were lost, and the follow-up in manually processing thousands of modifications was not much better. Providing a total e-closing process is the only way to go.
Start electronic, stay electronic
Today, lenders should only need to “paper out” when they want to provide someone with a copy. Taking paper documents and putting them through optical character recognition is not the answer, either. In a full e-mortgage world, the data is input di- rectly into the system of record, and the documents are e-signed and e-notarized in the same system. All of the data in the documents can be verified electronically and can be “rep and warranted” for compliance.
At this point, there is no benefit to relying on paper - there are only downsides, and significant ones at that. The use of incomplete or inaccurate paper documents can result in the following:
■ Extended locks;
■ Trailing docs;
■ Manual verification of the closing disclosure;
■ Increased risk of non-compliance and exposure;
■ Increased time and costs for staff training;
■ Reduced transparency; and
■ A lack of control.
Going 100% paperless, on the other hand, yields numerous benefits. Lenders are able to fund with certainty; turn times are improved; shorter closing times and times to close are real- ized; a superior customer experience is established; issues/surprises at the closing table are avoided; compliance is automatically verified, and risk is greatly reduced; a full electronic audit trail is securely maintained in an e-vault, with record retention to satisfy the electronic evidence requirement; investors are able to fund without ex- ceptions or trailing documents; and consumers enjoy a much more expedient process that accompanies much-needed visibility and access to online tools. Simply put, the overall process becomes unprecedentedly consistent and efficient.
Get ready - it’s really coming this time
The GSEs have accepted e-notes for quite some time now and are ar- dent proponents of the e-mortgage. Today, lenders not only have enormous responsibility to be compliant at all times, but they also must prove compliance adherence when called upon. Investors and servicers must also verify compliance, as well. TRID dictates that entities directly involved with the loan file must be able to demonstrate full compliance at all times. An e-mortgage solves all of this with a well-documented historical record of events that are time-and-date-stamped to show detailed proof of compliance.
From a marketing perspective, millennials are quickly gaining buying power and will become a business-critical market to serve moving forward. They want to conduct much of the mortgage process online. Those lenders that don’t have an e-mortgage process in place will be at a competi- tive disadvantage sooner rather than later.
As the regulatory environment in- tensifies and the CFPB continues its policing, we may reach a point where the LOS no longer serves as the core system of record - at least when it comes to compliance. Instead, the development of a comprehensive CMS will be the ultimate keeper and controller of compliance data, working with the LOS via an integration to share relevant information.
So what are lenders waiting for?
The platforms already exist to go “e,” the regs certainly encourage lenders to go this route sooner rather than later, and the customer is online, so what are lenders waiting for? Many refuse to change. Others refuse to educate themselves - or they refuse to see that there are no legal issues with moving forward. Still, others are waiting to see exactly how the CFPB handles its audits in the future.
With the minimum fine for a minor infraction now at about $5,000 a day, a lender could pay a hefty price for procrastination. Lenders had better get ready now, or some may find themselves in a very precarious situation.
Press Release:
LAKE MARY, FL, Aug. 15, 2016 /CNW/ - DH Corporation (TSX:DH) ("D+H"), a leading provider of technology solutions to financial institutions globally, today announced that it has brought on more than 100 new lendersto its MortgagebotLOSTM solution, after signing a reseller agreement with DocMagic, Inc. ("DocMagic") last October. DocMagic is a leading provider of fully compliant loan document preparation, compliance, eSign and eDelivery solutions.
The agreement was signed to offer clients a seamless integration between DocMagic and D+H's MortgagebotLOS. This mirrors a broader industry trend among financial institutions looking for comprehensive, end-to-end solutions that handle all of their lending needs.
"We are happy to see that within just a few months, our partnership with DocMagic has been a success, and has kept D+H ahead of the trend in end-to-end solutions," said Steve Hoke, Head, Lending, Retail, Product Management, Mortgagebot. "DocMagic's ability to introduce, train and support so many new clients in such a short period of time speaks volumes about the company and its products. We are thrilled by the great reception to this joint solution, and we expect it to continue driving growth going forward."
DocMagic provides an extensive set of reps and warranties on all of its calculations, documents and data, which gives lenders peace of mind that they are fully compliant along with an actual insurance-backed policy.
"D+H has been a very hands-on and responsive partner to work with while jointly supporting our mutual clients," said Dominic Iannitti, President and Chief Executive Officer of DocMagic. "Like DocMagic, D+H places a heavy emphasis on compliance, technology and customer service. This strong foundation will no doubt lead to more mutual clients enjoying the exceptional service levels that facilitate customer retention."
DocMagic and MortgagebotLOS were also ahead of the curve when it achieved complete compliance with the TILA-RESPA Integrated Disclosure ("TRID") rule well before it became effective on October 3, 2015.
About D+H
D+H (TSX: DH) is a leading financial technology provider that the world's financial institutions rely on every day to help them grow and succeed. Our global payments, lending and financial solutions are trusted by nearly 8,000 banks, specialty lenders, community banks, credit unions, governments and corporations. Headquartered in Toronto, Canada, D+H has more than 5,400 employees worldwide who are passionate about partnering with clients to create forward-thinking solutions that fit their needs. With annual revenues in excess of $1.5 billion, D+H is recognized as one of the world's top FinTech companies on IDC Financial Insights FinTech Rankings and American Banker's FinTech Forward rankings. For more information, visit dh.com.
About DocMagic
DocMagic, Inc. is the leading provider of fully-compliant loan document preparation, compliance, eSign and eDelivery solutions for the mortgage industry. Founded in 1988 and headquartered in Torrance, Calif., DocMagic, Inc. develops software, mobile apps, processes and web-based systems for the production and delivery of compliant loan document packages. The company's compliance experts and in-house legal staff consistently monitor legal and regulatory changes at both the federal and state levels to ensure accuracy. For more information on DocMagic, visit www.docmagic.com.
Press Release:
DocMagic puts its money where its mouth is with the most far-reaching compliance guarantee of its kind in the mortgage industry
TORRANCE, Calif., Feb. 16, 2016 -- DocMagic, Inc., the premier provider of fully-compliant loan document preparation, compliance, eSign and eDelivery solutions, today announced the development of an extensive set of new reps and warrants for its calculations, documents and data, which provides peace of mind to lenders when it comes to compliance with the TRID rule.
The greater risk of civil liability under the new TRID disclosure requirements means lenders and investors may face liability for incorrectly completing various sections on the TRID disclosures. With DocMagic's TRID-ready systems and now the Premium Compliance Guarantee, DocMagic has implemented a solution that mitigates lender risk of non-compliance. With the Premium Compliance Guarantee, the Loan Estimate and Closing Disclosure are guaranteed to be accurate and complete.
Additionally, the Premium Compliance Guarantee ensures timely electronic delivery of initial disclosures, compliance with federal and state high cost/HPML laws and accurate document selection logic resulting in compliant loan packages. The Guarantee also ensures that all other compliance and data validation audits will trigger at the appropriate times during the loan process, providing critical warning messages to help lenders stay in compliance with applicable laws.
The offering is backed by a $5 million dollar guarantee (up to $50,000 per loan) and DocMagic customers will enjoy a 36-month claim filing period. Beginning February 15, 2016, all new DocMagic customers will automatically receive the new premium rep and warrant offering. Existing DocMagic customers will be given the opportunity to protect their future loan files for an additional nominal fee.
"Now more than ever, our clients need assurance that they are operating in full compliance at all times," said Dominic Iannitti, president and CEO of DocMagic, Inc. "That is why we invested in developing and integrating the Premium Compliance Guarantee into DocMagic's suite of products, including the TRID-based SmartCLOSE™ collaborative closing portal, for every user on every transaction."
Rich Horn, the former CFPB attorney who led the TRID rule making stated, "Long before the initial Aug. 1 TRID effective date, DocMagic's industry-leading compliance, legal and technology teams proved that their systems were fully TRID compliant. This enabled DocMagic to provide an insurance-backed guarantee on their products and services, including TRID disclosures prepared using SmartCLOSE™, which speaks volumes about the confidence they have in their solutions."
"With the integration of the Premium Compliance Guarantee into DocMagic's suite of services, significant lender risk is virtually eliminated," asserted Melanie Feliciano, chief legal officer at DocMagic. "DocMagic has developed the most advanced and effective compliance solution in the industry - and we've backed it with a solid guarantee we are proud to offer our clients."
About DocMagic:
DocMagic, Inc. is the leading provider of fully-compliant loan document preparation, compliance, eSign and eDelivery solutions for the mortgage industry. Founded in 1988 and headquartered in Torrance, Calif., DocMagic, Inc. develops software, mobile apps, processes and web-based systems for the production and delivery of compliant loan document packages. The company's compliance experts and in-house legal staff consistently monitor legal and regulatory changes at both the federal and state levels to ensure accuracy. For more information on DocMagic, visit http://www.docmagic.com/.
