Format to Allow 'Electronic' Examinations of Originators

Banking and mortgage regulators have developed a new file format that will allow for electronic examinations of mortgage originators. The new format, called the Licensee Examination File, is designed for use by mortgage loan originators, software providers and consultants and provides a standardized way to prepare loan portfolio data for online submission to state regulators. Documentation on the new format will be available on the "RCCertify" website which will have a ".org" address and launch on Feb. 22. The LEF was created by the CSBS/AARMR Multistate Mortgage Committee and unveiled at the NMLS User Conference in San Diego. The electronic transmission of data is part of the MMC's enhanced supervision of mortgage entities under the CSBS/AARMR Nationwide Cooperative Protocol and Agreement for Mortgage Supervision. Beginning last year and continuing through 2010 the MMC has been and plans to be conducting pilot examinations using ComplianceAnalyzer software provided by ComplianceEase. Lenders are expected to provide loan portfolio data uploads to state regulators by 2011. John Prendergast, chief risk officer for the Massachusetts Division of Banking and the chair of the MMC said, "Our vision of an improved examination process through the use of new technology has been in the works for several months, but one of our main challenges has been the inability of lender systems to feed data directly to the regulator in a form that is readable by the ComplianceAnalyzer program." This new format rectifies that, he said.