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Mortgage Technology & TRID Compliance Risk: Part 2

Posted on the 04 June 2015 by Codymiles

Mortgage compliance risk has become a top focus for most lenders. The new regulatory environment, which concerns even the smallest institutions, has led many companies to recommit to their compliance efforts and reevaluate their policies and workflows. Because of this, mortgage technology vendors, rather than in-house compliance staff, have become a high consideration for most companies as a cost-effective solution to complying with constantly changing regulations.

In order for banks and credit unions to survive in post-TRID, however, technology vendors must improve. The new disclosure rules will demand fast, secure and compliant exchanges of information. Moreover, it not only concerns timeliness but also accuracy. With this, new process and operational controls may be required to ensure both. Additionally, preventive and defective controls may need updating to ensure the organization has the proper safeguards in place to meet the requirements.

The key to reducing TRID compliance risk is technology. The right technology vendor with the proper automation processes can dramatically leverage the workload of all parties involved in a mortgage transaction. In our new eBook, “Mitigating Impact: How to Reduce TRID Compliance Risk with Mortgage Technology” author Jorge Sauri reveals the most important characteristics to consider in a mortgage technology vendor. Here are two more tips from that eBook:


4. Supporting Documentation

These new rules are not merely investor guidelines that change whether or not you can sell a loan; this is government legislation. Not having the proper documentation on file could lead not only to the repurchase of a loan but fines levied against the borrower. It is essential to be able to prove to the CFPB through proper documentation, systems and monitoring that your borrowers have the ability to repay and you’re originating qualified mortgages. Here again MortgageDashboard has applied additional features to ensure compliance.

Accessible from Page 2 of the 1003 in MortgageDashboard, the Debts, Income & Assets Worksheet complies with every aspect of the Ability to Repay rule. Showing the source documentation and calculation clearly, this worksheet creates the CliffsNotes version of a loan file. It tells the story of the loan in three pages so that, years later, you can clearly show how each decision was made. The average loan file may be up to 500 pages. Our three-page Debts, Income & Assets Worksheet keeps lenders in the clear.


5. Automatic Updates

Lenders should never have to worry about their compliance software becoming outdated. Nor should they have to wait for system upgrades or purchase new versions of their lending software. 

Since MortgageDashboard is web-based, it is updated continuously. It is designed to grow and adapt right along with compliance changes.

Leverage your compliance through technology

The full impact of TRID has only begun to be realized for financial institutions. For technology vendors, however, it has already driven major changes. In terms of innovation, the mortgage servicing sector has traditionally lacked. Focus has primarily been on origination. Soon, financial institutions must become more proactive in meeting TRID requirements. This industry change has led to several technological improvements for the servicing sector, as communication must be facilitated with borrowers. The rest of the compliance tips are listed in our new eBook, “Mitigating Impact: how to Reduce TRID Compliance Risk with Mortgage Technology.” Download for free and understand how you can reduce costs, risk and stress.

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