DocuTech Automates Management of Prepayment

With increased government scrutiny on loan compliance in the currently turbulent mortgage industry, prepayment penalty configurations have been a difficult process to manage for lenders. Each state, and many investors, carries different requirements and configurations for applying prepayment penalties to mortgages.

As a means of ensuring all prepayment configurations are compliant with local and investor guidelines, DocuTech Corp., Idaho Falls, Idaho, a provider of mortgage documents and compliance technology, has upgraded ConformX, the company's automated document creation and verification software.

The new release of ConformX 3.10 adds a new process for managing prepayment penalty configurations. The upgrade manages more than 500 prepayment penalty configurations through an intuitive, direct interface with loan origination systems.

The addition of prepayment penalty compliance to ConformX will allow users to have updated prepayment penalties automatically added to the loan.

"The amount of time it takes to manage all these rules is tremendous. We have a full-time staff of 30 to 40 people doing nothing but tracking changes and working on these compliance issues. Even for larger institutions, it takes a tremendous amount of manpower to focus on the peripherals and not on the ball, which is, to close loans," said Monte Larsen, chief marketing officer at DocuTech."

Mr. Larsen added that ConformX 3.10 is Web-based, so everything is updated immediately. Lenders have access to a 24/7 closing machine to help them make more money and close more loans.

Traditionally, a difficult component to manage, prepayment penalties have been simplified with ConformX 3.10. It includes more than 500 prepayment configurations that meet all federal, state and investor requirements. A rules engine simplifies the management of the configurations by presenting the applicable configurations within the LOS.

"Many lenders do not have the time to maintain the prepayment penalty guidelines and requirements from individual investors, state governments and the federal government," said Mr. Larsen. "ConformX 3.10 automatically applies the correct prepayment penalty values to the loan based on property state, loan amount and other variables. These configurations are automatically updated by DocuTech, eliminating the need for time-intensive maintenance."

In addition to the new prepayment penalty component, ConformX 3.10 offers a Web-based solution that turns any Internet connection into a loan origination or closing office. Automatic calculations and data safeguards ensure that loan documents meet state and vendor requirements. ConformX 3.10 provides print, e-mail and Web-posting options from any remote connection location.

According to DocuTech, ConformX 3.10 also eliminates the tedious work of maintaining each state's individual prepayment penalties and increases the salability of loans on the secondary market, which thereby frees up warehouse lines of credit.

Mr. Larsen pointed out that a lender's job is to close loans, not worry about constantly changing compliance regulations.

"As we look at increased government scrutiny on all these complaint issues, companies need to look to experts in the field to help them through turbulent times and allow them to focus," he said. "We're going to continue to identify problems and come up with fast solutions, rather than have [lenders use their] full-time staff to worry about it." (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com/

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