With the 2010 revisions to the Real Estate Settlement Procedures Act requiring lenders to provide mortgage and closing services information to consumers in an accurate and timely manner, ClosingCorp of La Jolla, Calif., has created a new pricing tool for title companies and settlement service providers to put on their own websites.
Paul Mass, president of ClosingCorp, said the product, SmartGFE Calculator, allows for "instant, accurate good-faith estimates, that we guarantee," so the lender will not have to eat fees or pay any penalties because of discrepancies between the disclosure and the HUD-1.
It also allows consumers to know the numbers they are giving are accurate within the allowed tolerances under RESPA.
These calculations are performed quickly and include title and settlement rates, transfer taxes and recording fees to be entered on the GFE. Mass noted that transfer tax and recording fee information has to be accurate as there are no tolerances for error allowed under RESPA for these.
ClosingCorp compiles a proprietary database on closing services, including title and settlement companies and rates. They are made available through services, Mass said, like the SmartGFE Calculator and the SmartGFE Service.
The SmartGFE Service is used by some of the largest lenders in the country, he said. But the calculator is being sold and licensed to title companies for use on their websites so they can serve their originator clients directly.
The calculator is hosted on the title company's website on a private label basis. ClosingCorp programs the calculator with the title agency's rates plus the rates and fees from the underwriters which they use.
Mass explained the change in RESPA is what inspired both the SmartGFE Service and the calculator. When the Department of Housing and Urban Development began making known it was looking to change the disclosures, Mass said, "We said to ourselves 'gosh, who is better positioned then us with this database' to develop a service with tools like a calculator to provide (this information to) banks who are now under a real burden to provide accurate estimates." In the past, both the accuracy and timeliness of this disclosure was not important.
So ClosingCorp, looking for ways to monetize its database, created the SmartGFE tools. The information is passed on in a format that is consistent with the formats of the GFE and HUD-1, he said.
The challenge is to make sure the products stay responsive to the marketplace as well as comply with any new regulations from the Consumer Financial Protection Bureau.
CFPB has put a couple of proposed GFE revisions out for comment. However until something final is out (as these are not accompanied by a rule or any guideline revisions), ClosingCorp is not yet preparing any changes to its products. "It would be licking my finger and putting it up in the wind at this point," Mass said. So right now, he is just following what is happening at the agency.
Separately, users of Wipro Gallagher Solutions' NetOxygen loan origination system will have access Ernst Publishing's XML Direct data and calculation tools to populate their GFE and HUD-1 forms.
This product allows for the automated generation of title services and insurance fees, government recording charges and transfer taxes.
The interface eliminates the maintenance and research need to locate correct property recording jurisdictions, the companies said.
