Press Release:
Completed software updates now accessible online for users to become familiar with the new changes.

TORRANCE, Calif., May 7, 2015 -- DocMagic, Inc., the premier provider of fully-compliant loan document preparation, compliance, eSign and eDelivery solutions, announced that it has completed all required TILA-RESPA Integrated Disclosure rule (TRID) software development and testing, and the new TRID enhancements have been officially released into DocMagic's production environment.

The new TRID offering is available to all DocMagic clients and all LOS partners for in-depth testing. DocMagic wants each of its clients and partners to become acquainted with the TRID enhancements and functionality that was recently incorporated into its suite of web-based document production systems.

"We are giving our clients and partners the ability to be well-prepared for TRID far in advance of the Aug. 1 deadline," said Dominic Iannitti, president and CEO of DocMagic. "After extensive internal testing, re-testing, and BETA testing by a select group of lenders, we perfected the changes required for TRID compliance and are now ready to open the flood gates. We are confident that our systems are now fully compliant with TRID, and we are excited to have our clients and LOS partners access and get used to the new TRID screens and functionality."

DocMagic provides a step-by-step TRID testing guide to all lenders and its support team has already successfully fielded hundreds of questions since the release last month. The company reports that lender testing with DocMagic has been going as planned and no software issues have been unearthed. 

DocMagic says that it has already started client training sessions on the new loan estimate and closing disclosures, has made available detailed training videos, and is presenting regular educational webinars on TRID.

About DocMagic:
DocMagic, Inc. is a 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/.

Press Release:
New solution brings lenders and settlement providers together inside a secure collaborative portal to view and exchange fee data prior to closing

TORRANCE, Calif., April 23, 2015 -- DocMagic, Inc., the premier provider of fully-compliant loan document preparation, compliance, eSign and eDelivery solutions, announced that it will launch a Collaborative Closing Platform for the mortgage industry. The solution is comprised of a secure, seamless and dynamic web-based portal that efficiently and expeditiously helps lenders comply with the TILA-RESPA Integrated Disclosure (TRID) rule that becomes effective on August 1.

DocMagic's Collaborative Closing Platform enables streamlined, real-time exchange of information between lenders, settlement agents and their associates via a secure web portal designed to electronically access, edit, validate and approve both data and documents. As a result, the coordination of all closing costs and audits of critical disclosure details are addressed prior to closing and in full compliance with TRID.

"Our Collaborative Closing Platform brings all of the necessary closing components and parties together to effectively assist lenders in complying with TRID in a very efficient, timely fashion," said Dominic Iannitti, president and CEO of DocMagic. "With one simple click, lenders can invite their settlement providers to view and update disclosure data, which is automatically analyzed by DocMagic's comprehensive Audit Engine in preparation for final approval by the lender."

The solution utilizes version 3.3 of the new MISMO standard that is needed for TRID to bi-directionally and securely pass data between parties. DocMagic's Audit Engine automatically tracks RESPA tolerance levels, changes in fees and related approvals to ensure compliance with applicable regulations. Each step in the process is tracked and stored within the secure environment.

Approved parties that are involved in the process can view a full electronic audit trail history of compliance, workflow and document management, which is securely captured and housed in a centralized area for easy access and reporting. Inside the secure platform parties with appropriate permissions can access shared documents, enter and adjust data, view the closing disclosure in real-time as it is modified, and communicate via an integrated chat system.

DocMagic's Closing Collaboration Platform leverages its eSign technology to deliver and facilitate the electronic signing of the closing disclosure and related documentation. The solution also provides a bridge that can seamlessly integrate with title, closing and lender LOS systems. The company says that in addition to lenders and settlement providers being able to utilize the platform, other relevant technology vendors can also take advantage of the solution to review and share data and documents.

About DocMagic:
DocMagic, Inc. is a 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/.

Join DocMagic's Compliance Edge™ for a FREE Webinar!

TRID: The Basics

This webinar is the first in our series focused on the TILA-RESPA Integrated Disclosure (TRID) Rule. Our goal is to help you with answers to the compliance questions you’ll be asking as you prepare for TRID reform on August 1, 2015.

DocMagic’s Chief Compliance Officer, Gavin T. Ales, will clarify the fundamental requirements surrounding the new regulations.

Build your fundamental knowledge:
■ Loans which are covered by the TRID Rule
■ New definitions explained
■ The Loan Estimate/Closing Disclosure in detail
■ Timing & tolerance requirements

Press Release:
Adherence to MISMO’s latest dataset helps prepare DocMagic for the CFPB’s Integrated Disclosure deadline

TORRANCE, Calif., Feb. 11, 2015 – DocMagic, Inc., the mortgage industry’s leader in compliant loan document preparation and driver of complete eMortgage adoption, announced that its entire solution set now adheres to version 3.3 of the Mortgage Industry Standards Maintenance Organization (MISMO) Reference Model.

The Consumer Financial Protection Bureau’s (CFPB) Integrated Disclosure Rule combines the mortgage disclosures required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). It requires lenders to use the new integrated disclosures beginning on Aug. 1, 2015. Successful compliance with this rule depends on use of the latest version of the data standard.

Version 3.3 of MISMO establishes a common dataset that is essentially a prerequisite for lenders to use the CFPB’s new integrated disclosures and share the information about the disclosures with their industry partners. The CFPB's Integrated Disclosures will replace the current Good Faith Estimate (GFE) HUD-1 Settlement Statement, and Truth in Lending (TIL) disclosures for most residential mortgage loans as of Aug. 1, 2015. DocMagic is the first document preparation software vendor to implement MISMO version 3.3.

“Our early implementation of MISMO version 3.3 is significant because it is yet another step that we are taking to proactively prepare for the CFPB’s new Integrated Disclosure rule, as well as industry innovation involving the disclosures,” said Dominic Iannitti, president and CEO of DocMagic. “Any software provider that is involved in loan closings or data exchange must update their respective systems to implement the new dataset in order to effectively support their partners and lender clients. Those organizations that wait will likely not be ready to meet the CFPB’s deadline and as a result will encounter serious compliance issues.”

In March of 2014, the GSE’s introduced the Uniform Closing Dataset UCD, which is based on the MISMO v3.3 Reference Model standard used to support the Closing Disclosure under the CFPB’s new Integrated Disclosure rule. The Closing Disclosure is the form that combines the final TILA and HUD-1 Settlement Statement. As a result, closing documents will change significantly come Aug. 1, 2015. Lenders will be responsible for the Closing Disclosure and will need to automatically and seamlessly exchange the data from this disclosure with its settlement agents and other partners. DocMagic is ready to effectively and compliantly transition to this new disclosure for its entire customer base.

Other organizations that will be affected by the rollout of version 3.3 of MISMO, the GSE’s introduction of the UCD, and the CFPB’s rule include settlement software and loan origination system (LOS) providers, among others.

DocMagic’s early implementation of MISMO version 3.3 has allowed the company to already begin working on standardizing closing document forms for its clients and partners.

About DocMagic
DocMagic, Inc. is a 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 constantly monitor legal and regulatory changes at both the federal and state levels to ensure accuracy. For more information on DocMagic, visit www.docmagic.com.

The new mortgage wave is now.

Executive Conversations is a HousingWire web series that profiles powerful people in the financial industry, highlighting the operations and the people that make this sector tick. In the latest installment, we sit down with Don Iannitti, president and CEO of DocMagic, to see how the company how the company thrived in 2014, along with its plans to grow in 2015.

HW: DocMagic has announced some key acquisitions in 2014, how are these coming along and where does the company plan to grow in 2015?

Iannitti: We made two outstanding acquisitions in 2014 that will have a significant impact on our business moving forward: eSignSystems and Doc-Tech Corp. Both were executed flawlessly and are integrating exceptionally well with the existing DocMagic family. While both acquisitions bring layers of new benefits and opportunities to DocMagic from an asset, customer and opportunity standpoint, I think that the best part of each of those deals is the incredibly talented people that we were able to bring on board. They have already added tremendous value to DocMagic and are both perfect fits within our corporate culture and level of commitment and intensity our organization has.

We also recently secured an exclusive agreement with a complementary technology vendor that we will be announcing shortly, which puts us in a unique position to achieve a 100% paperless eClosing. In addition, we will be evaluating other deals of interest throughout 2015 that add to our competitive advantage. With many of the new and constantly changing compliance rules that are being enacted, we see huge opportunity for us to serve as a single-source vendor for fully compliant, highly efficient eMortgage processing from end-to-end.

HW: The CFPB will again be front and center with compliance throughout 2015 that will impact the entire mortgage supply chain. Are you working with them on compliance initiatives to help?

Iannitti: Part of the CFPB’s “Know Before You Owe” mortgage initiative, which is designed to improve the home-buying experience for consumers is its eClosing pilot program. It analyzes how technology can improve the borrower experience.

DocMagic is one of the lead vendors participating in the CFPB’s eClosing Pilot, which is in direct response to providing an automated solution to the new Integrated Disclosure, (TRID) regulation for August 1st. Much of that encompasses providing a consistent electronic process and streamlined consumer experience to ensure borrowers are better informed and educated before they go to closing and on the lender side to ensure the lender has an electronic documented process (audit trail) to ensure proof of compliance around delivering the disclosures to consumers.

Although the pilot itself is currently only focused on the delivery of the “Closing Disclosure Form,” the lenders we are working with already provide an initial electronic disclosure, (eDisclosure) with much of the verification being paperless up to providing an electronic pre-closing and full eClosing process that includes eNotary, eRecording and eDelivery to the investor via MERS eRegistry.

In short, we’ve already satisfied the pilot’s initial objective and have actually taken it much further, achieving a full eClosing from soup-to-nuts using DocMagic’s single solution.

HW: There has been a lot of talk about achieving a true eMortgage. How close do you think we are?

Iannitti: There are many different components that all need to work very well together in order to achieve an actual eMortgage from start to finish --- completely electronically and without the use of any paper whatsoever. The industry has made significant advancements with eMortgages over the years from e-documents to e-signatures, e-notaries, e-delivery, e-closing, e-recording and e-vaulting. What we’re finding, however, is that there are currently too many vendors involved to make it work smoothly. This is why we are evolving into a single-source provider of comprehensive services. At DocMagic, we have the technology and are eMortgage ready; but, the next challenge is in getting major investors and other industry players to embrace and accept it. So, when will broad-based market adoption occur is the billion dollar question.

What we have seen in recent years is a confluence of eEnabling events that have risen out of a combination of 1) technology adoption, 2) government mandates and 3) the proliferation of data-centric models that we believe creates a paradigm of “eInevitablity” that will begin to show real leaps in market adoption in early 2016. The environment has become an environment where the only way to be compliant and competitive is to eliminate the paper. Many of our customers see this already, and are working with us to set up an eEnvironment.

HW: What are some of the biggest challenges that lie ahead in 2015 and how do you plan on overcoming them?

Iannitti: Had you asked me this question last year, I would have said our biggest challenge was going to be driving eAdoption, but I am pleased to say that certain marketplace drivers ended up getting that well underway.

Currently, our biggest opportunity is going to be ‘riding’ the eWave. This means that we will be material in transitioning increasingly greater numbers of our customers to an eEnvironment that is highly regulated and highly competitive. Customers are unique and one size doesn’t fit all. It will be a time of great learning for everyone in this market --- everyone. Maintaining balance while assimilating the knowledge we gain and continuing to innovate amid an incredibly fast-moving regulatory intensive business landscape is our opportunity, and we are very well-positioned to capitalize on it. We’ve been around for 25 years and have successfully navigated through many industry cycles, always coming out on top.

Compliance rules abound; they here to stay. We’re ultra-prepared to tackle them and serve as a very effective electronic single-source solution to clients. We’re quickly transforming from once being a document preparation company into an eServices company.

As featured by HousingeWire, January 2015

By Tim Anderson,
Director of eServices,
DocMagic, Inc.

What can the industry expect when the CFPB’s final rule and new forms take effect next year?

When federal regulators change the rules governing the requirements for originating a mortgage loan, it can mean pain for both the industry and the consumers it serves. But this time, the move to an integrated disclosure may surprise you and translate into an unexpected side benefit to all parties—that benefit is the eMortgage.

For almost a decade and a half, proponents of all-electronic lending have urged lenders to take the paper out of the process in favor of fully electronic mortgage origination. Despite its significant benefits, eMortgage adoption gave way to the critical mass of lenders unwilling to abandon their legacy systems and paper-intensive processes.

Meanwhile, behind the scenes, lenders’ partners have been implementing systems that allow them to complete more of their loan origination workflow without stopping to paper out. The reality is that a fair amount of lenders have, in fact, been operating fundamentally without paper up until the loan closing, when they print all of the forms for their borrowers’ signatures.

We all know regulation drives change, and the new integrated disclosures lenders will begin using next year provide all the incentive needed to let go of the paper once and for all. Here’s why.

Complying with New Disclosure Rules
It’s not just the documents that are changing next year; it’s also how the lender is expected to interact with borrowers. There are essentially four elements of consideration:

• the new MISMO 3.3 data format and reconciliation of the data feed between the initial loan estimate and final closing disclosure;
• delivery notification requirements;
• electronic audit trail as “proof” of delivery and compliance;
• storage retention requirements to maintain this proof.

For most lenders, their document preparation partners will ensure the right data is mapped to the right fields in the proper format. They can also assist with making sure the initial and final disclosures are accurate and within acceptable tolerance thresholds. Most lenders will see little change in their operations for this reason, at least initially.

Speeding up Closings with Electronic Delivery
It’s the delivery requirements and the resulting benefits of using electronic delivery that will direct lenders to make changes to their current operating processes. The initial loan estimate must be delivered or placed in the mail within three days of application, which should sound familiar to lenders. In addition, the loan cannot close sooner than seven days after the loan estimate is delivered or mailed. These rules are similar, but not identical to current requirements outlined by the Truth-in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).

If the loan estimate isn't delivered in person, it is considered “received” by the consumer three days after it is placed in the mail. However, the new rule has an interpretation that is specific to electronic delivery. It provides that the creditor may, alternatively, rely on evidence that the consumer received the loan estimate disclosure sooner by means of an electronic delivery method.

This concession is significant. The lender could send the forms to the post office and then wait the three days stipulated in the rule. But that means the lender cannot begin charging fees until that three-day period is over. The rules are specific and state that a creditor may not impose a fee, other than a credit report fee, before the consumer has received the disclosure and indicated intent to proceed.

If the lender sends the initial loan estimate disclosure electronically and uses a system that can verify it was received, the lender can move forward with the loan more quickly, perhaps up to three days sooner. This is good for the lender, but it’s also good for the borrower, who is just as eager to get the process underway.

The closing disclosure is somewhat different and is more likely to give lenders trouble. Like the initial loan estimate disclosure, timing is dependent upon when the borrower receives the notification. In this case, the loan closing cannot be scheduled until three business days after the borrower has received the closing disclosure form. If mailed, the presumption is that receipt occurs three business days later, which puts the closing at least six days after mailing.

Again, if the documents are delivered electronically, the lender may proceed to schedule the closing the moment there is evidence the borrower received the electronic form. As with electronic delivery of the initial disclosure form, this can shave up to three days off the process. The lender could send the documents by courier and eliminate the three-day waiting period with in-person delivery, but only at significant additional expense.

The Real ‘Compliance’ Impact of Disclosure Changes
RESPA and TILA have always had the same purpose they have today: to inform consumers about their loans and the associated costs. In that respect, the keys to compliance haven’t changed. The goal remains to be as accurate as possible, as early as possible so that the consumer can make an informed decision. Get this right and the consumer won’t be unpleasantly surprised later in the process.

What has changed over the years is the meaning of “accurate.” In this new rule, additional categories of charges have been moved to the zero-tolerance bucket. There is now no margin for error in estimating certain fees, and only a small tolerance for others. Lenders need to implement controls that ensure costs associated with a loan don’t exceed the amount estimated and disclosed to the borrower.

It’s also important to note that regulators are very specific about the information lenders are to communicate to borrowers. The goal is to ensure consumers can easily compare loan estimates from different lenders before selecting a loan, and one of the ways to accomplish this is for the disclosure forms to be standardized. The result is that even the smallest details of the forms have specific rules now, and the rules are complex—hard to understand and hard to explain. Lenders will need to rely on their technology partners for assistance, and they’ll need to provide extensive training for team members who produce these disclosures.

Noncompliance comes with a heavy cost. If charges to the borrower vary more than is permissible, the lender must refund those fees. Additionally, existing annual percentage rate (APR) and finance fee tolerances remain in effect, and curing those errors can be expensive. Finally, noncompliance with the new regulations carries the risk of fines, penalties, and court actions.

But it’s not the financial risks associated with individual cases of noncompliance that should trouble lenders the most. The greatest challenge will be managing team members through the necessary change process. The CFPB has mandated the mortgage industry use technology to take more control over the mortgage closing process. In an April press release, the bureau pointed to four major pain points that a better closing process could aid: (1) giving borrowers more time to review documents, (2) reducing the overwhelming stack of paperwork, (3) making the documents easier to understand, and (4) reducing the number of errors in documentation.

Shifting Toward eMortgages
Ultimately, the real impact of the new integrated disclosures will be a shift on the part of the lending community toward easing the pain in those four areas. Electronic documents will help achieve this end, so more lenders are expected to start using e-docs for more of the mortgage process. The timing requirements stipulated by the new rule will make adoption more attractive to lenders. Some will view the benefits to the consumer as a bonus, and once a lender is sending documents electronically, a fully electronic closing seems much more viable and possible.

Eventually, going fully electronic will be the easiest way to prove to regulators and auditors that every action taken by the lender was compliant. Electronic audit trails have long been used for compliance purposes. It makes sense that lenders will make use of them to defend against future action by regulators.

But the changes don’t end there. There will also be some changes in terms of the roles and relationships lenders have with some of their partners. For instance, the relationship between the mortgage broker and the lender will change because under the new rules, the mortgage broker can provide the borrower with the necessary integrated disclosure forms, which merge and meet the requirements for both TILA and RESPA. In the past, the broker handled RESPA’s Good Faith Estimate (GFE) and the lender was responsible for the Truth-in-Lending statement.

Under the new rule, lenders that accept loan submissions from third-party originators must adjust their processes to ensure a timely, accurate disclosure is provided to the borrower. Of course, the lender is ultimately responsible for compliance.

Another relationship that may be reinvented is that of the settlement agent. Presently, the lender produces the final Truth-in- Lending disclosure form, and the settlement agent typically prepares the HUD-1 statement to satisfy RESPA. Under the new rule, the requirements are integrated, so the final disclosure form can be provided by either the lender or the settlement agent.

Ultimately, however, the lender is on the hook for compliance. Lenders need to implement a business process that ensures correct, complete information is available to whichever party prepares the final version of the disclosure and presents it to the borrower. In the end, whoever provides the final disclosure is likely to provide it electronically; it just makes more sense.

CFPB is doing its job as mandated by the Dodd-Frank Act. The bureau has been diligent in responding to questions from the industry and issuing guidance. Ultimately, it’s the industry’s own responsibility to integrate all of the rules, guidance, and questions into daily lending practices and actionable plans. In the case of the new integrated disclosure rules coming next year, it might actually serve to take the industry where many say it should have gone years ago— right to the eMortgage.

--
Tim Anderson is director of eServices for Torrance, California-based DocMagic. He has been a long-time proponent of paperless lending and is a past winner of Mortgage Technology’s Steve Frasier Award. He can be reached at tim@docmagic.com.

As featured by TheMReport, October 2014

Technology. Innovation. Service.
MBA's Annual Convention & Expo
October 19-22 | Las Vegas, NV

Stop by booth #321 or schedule a meeting to experience the magic of new Mobile Technology, Integrated Disclosure Demonstrations and New Construction Documentation. DocMagic is proud to celebrate its 25th year of continual innovation in providing end-to-end Document Production, Electronic Delivery, Execution and Compliance Solutions for the Mortgage Industry.

We're pioneering new technology!

BorrowerMobile
DocMagic's visionary mobile application for tablets and smart phones provides all of the features your Borrowers need to keep their finger on the pulse of their loan status.
■ Keeps borrowers on top of loan status in real-time
■ Lenders can communicate loan conditions instantly
■ Integrates with any loan origination software system

New Integrated Disclosure
Let us show you what we are doing to prepare for Integrated Disclosures.
■ Learn about our targeted testing beginning soon
■ Pick up an implementation timeline to better prepare yourself

Construction Loan Documentation
Construction-only and Construction-to-Perm loan programs are now available for all 50 states, District of Columbia, and the Virgin Islands.
■ Fixed-rate and ARMS Programs
■ LIBOR and T-Bill indices available
■ Accommodates either purchases or refinances

Meet us at the conference. Schedule a meeting now!

By Tim Anderson,
Director of eServices, DocMagic, Inc.

As we all know (and can’t get away from by now), the Consumer Financial Protection Bureau (CFPB) has issued a rule that they state will simplify and improve disclosure forms for mortgage transactions. For applications received on or after August 1, 2015, the Loan Estimate must be provided to the consumer three business days after the application, and the Closing Disclosure must be provided to the consumer three days before closing.

The new Combined Disclosure Regulation is going to force lenders to connect to title agents at the time of application and prior to closing to ensure compliance. As some of the recent posts on Closing Call have discussed, there are tolerances and limits on the increases to closing costs. Here’s the official word on closing-cost increases, extracted straight from the CFPB’s Final rule on simplified and improved mortgage disclosures:

Limits on closing-cost increases

Similar to existing law, the final rule restricts the circumstances in which consumers can be required to pay more for settlement services – the various services required to complete a loan, such as appraisals, inspections, etc. – than the amount stated on their Loan Estimate form. Unless an exception applies, charges for the following services cannot increase: (1) the creditor’s or mortgage broker’s charges for its own services; (2) charges for services provided by an affiliate of the creditor or mortgage broker; and (3) charges for services for which the creditor or mortgage broker does not permit the consumer to shop. Charges for other services can increase, but generally not by more than 10%, unless an exception applies.

The exceptions include, for example, situations when: (1) the consumer asks for a change; (2) the consumer chooses a service provider that was not identified by the creditor; (3) information provided at application was inaccurate or becomes inaccurate; or (4) the Loan Estimate expires. When an exception applies, the creditor generally must provide an updated Loan Estimate form within three business days.

If the creditor makes certain significant changes between the time the Closing Disclosure form is given and the closing – specifically, if the creditor makes changes to the APR above 1/8 of a percent for most loans (and 1/4 of a percent for loans with irregular payments or periods), changes the loan product, or adds a prepayment penalty to the loan – the consumer must be provided a new form and an additional three-business-day waiting period after receipt of the new form.

Additionally, they go on to summarize details covering Proposals not adopted in the final rule:

The proposed rule would have redefined the way the Annual Percentage Rate or “APR” is calculated. Under the Proposal, the APR would have encompassed almost all of the up-front costs of the loan. The proposed rule would also have required creditors to keep records of the Loan Estimate and Closing Disclosure forms provided to consumers in an electronic machine readable format to make it easier for regulators to monitor compliance.

Based on public comments the Bureau received raising implementation and cost concerns regarding these two proposals, the Bureau has determined not to finalize these provisions in the final rule. The Bureau continues to believe these ideas may have benefits for consumers and the industry, however, and intends to continue following up on both issues. For example, the Bureau intends to work closely with the industry on private data standard initiatives to promote consistency in data transmission and storage. After additional study, the Bureau may propose rules on either or both topics.

There’s a business problem that arises from these changes; let’s look at it for a minute. With the faster and more accurate delivery requirement of the charges between the Loan Estimate and Closing Disclosure forms, constant and reliable communication will be key between lenders and title agents. During the new process, you’ll have to:

• Ensure accuracy of the Loan Estimate form at time of application

• Reconcile fees (with stricter RESPA tolerance guidelines) between the lender's system of record and title closing production systems on the final Disclosure document that must now be delivered three days prior to closing to ensure compliance prior to drawing docs

• Face challenges with the new requirement to support MISMO 3.3 intelligent data standards. For instance, if a lender is not using the same system and doc provider for the initial Loan Estimate form as well as the final Closing Disclosure, they are not going to easily reconcile data, documents and calcs to be compliant

• Be aware that most systems don’t even stand behind their GFE/TIL and APR calculations with a rep and warrant for compliance

• Provide an audit trail as proof of compliance. Recognize that it is now even more important that the data and documents are shared and synched between the lender's system of record and title production systems and easily and quickly accessible

The primary issue is not only delivering the closing documents to the consumer three days ahead of closing (consummation), but now, with the delivery deadlines and tolerance requirements, the lender is on the hook to ensure even greater accuracy of the GFE/TIL at time of application. So what does that have to do with you and technology? It means introducing new electronic processes to replace traditional paper processes and making sure you use the same provider so you have compliance consistency and integrity of the data.

It’s critical that your technology solution can facilitate the electronic sharing and collaboration of data & documents. On top of that, you will need to keep the process electronic to provide evidence and proof of compliance around receipt of delivery, acceptance and execution of documents that the CFPB is going to want to see and audit. Something, by the way, that both DocMagic and Pavaso already provide to their customers.

There has been much ado about the CFPB Combined Disclosure Regulation. There have been numerous seminars and webinars on the operational impact this is going to have on the traditional disclosure process. But are lenders really cognizant and looking at an overall “solution”?

For a variety of information on solutions to these issues, visit the TILA-RESPA Knowledge Center, where you can register for a free account to browse a knowledge base of articles and documents, or join conversations in the forums.

All information and views expressed or implied are provided without warranty and are only opinion. Each participant should seek legal representation for legal interpretation of the ruling and the CFPB directly for final instruction and interpretation. The final rule can be found here.

Tim Anderson
Tim Anderson brings more than 30 years of industry experience, having worked on both the lender and vendor side of the business. He has held executive management positions with LPS, Stewart, Fidelity, FreddieMac and HomeSide Lending, where he ran the eCommerce Division and worked at technology companies like Dexma, Microsoft and Tuttle Information Services. He was also the original founder of the eMortgage Alliance™ which promoted MISMO standards for delivering legal paperless processes. He currently is Director of eServices for DocMagic, Inc.

As featured by HousingWire, August 2014