With all of the changes that were taking place in the regulatory environment in 2009, as well as the proposed changes coming on in 2010, in September of last year Victorian Finance was looking for a system that would be “more automated” than what it was currently using.
“Before I was making calculations by hand and comparing things by hand and it was extremely time consuming,” explained Natalee Turkel, closing manager for Victorian. For example, to reconcile the initial Truth-in-Lending disclosure with the final one, she was eyeballing the documents and figuring out the tolerances for any changes by manual calculations.
The company elected to shift to a system from MRG Document Technologies. Automation also takes out the “human error factor” for compliance errors, she said.
MRG creates all of Victorian’s closing packages. Turkel inputs the information and the closing package is sent to the title company.
The information is now available in a “clear and concise manner, so that when I’m going back and reviewing it, it tells me if something is out of compliance,” she said.
Most of the time, if a change needs to be made, Turkel said she could do it herself. Although there have been occasions when she has had to call MRG for assistance.
Laura LaRaia, an attorney with MRG, said the system retains the most recently ordered good-faith estimate information. It runs a comparison between that information and the information provided for use in the closing package when that is ordered.
For example, the origination fee under the changes to the Real Estate Settlement Procedure Act cannot be higher than what was originally disclosed. Other fees have a 10% tolerance for change. If there are any variations, LaRaia said, MRG informs the lender.
Another recent law, the Mortgage Disclosure Improvement Act, revised the tolerance for changes in the annual percentage rate. The system also checks for whether the lender has exceeded that tolerance.
LaRaia, who heads up the customer service area, says there are attorneys that handle the clients' problems and a team of programmers on her staff so it can quickly make changes to the system when there are any legal or regulatory revisions. Lately, the customer service staff has been very busy dealing with the multitude of revisions.
MRG looks to give its clients a month to six weeks heads-up notice that a regulatory or legal change is in the works and they might have a new form in the document packages and/or they have their loan origination systems start mapping a certain field, she said.
It tracks all 50 states and the District of Columbia for changes in mortgage lending rules and regulations, as well as any changes on the federal level.
And right now, MRG and its clients like Victorian are waiting on the rules to come out from the Dodd-Frank Bill to see how those impact compliance issues.
“The regulatory environment, in an effort to stabilize the market and bring back consumer confidence...it’s just how do the lenders put them into practice and how do service providers like ourselves in the doc prep part, how do we help the lenders get that out there,” LaRaia said.
MRG waits until the final rule comes out before kicking its staff into high gear. It is tough to anticipate rules before they are final, because of all the revisions and how the regulators or secondary market will implement them, she said.
The system is both Web-based and rules-based. Users can limit which employees see what screens and set up the process based on how their company works.
