In the current regulatory environment, especially under the Consumer Financial Protection Bureau (CFPB)’s TILA-RESPA Integrated Disclosures (TRID) rule, the lender is responsible for accurate and timely delivery of key disclosures to the borrower.
Historically, the lender prepared early disclosures, often without collaboration with the settlement agent, and the settlement agent carried the burden of preparing the HUD-1 Settlement statement. Now, due to the strict tolerances on fees and high potential fines to the lender, most lenders are preparing the new forms (Loan Estimate and Closing Disclosure forms) themselves and requiring information from the settlement agent earlier in the process.
Today, the collaboration is often via phone or email and not centralized or audited. Since the lenders are on the hook for completing these forms correctly, they need stricter controls and more streamlined processes to reconcile data between the lender’s main system, the loan origination system (LOS), and the settlement agent’s system, the title closing system.
Lenders are under intense pressure to comply with these new rules and regulations. There is increased scrutiny and accountability thrust upon lenders in this new regulatory landscape. It requires lenders to rethink their lending practices, the touch points throughout the loan transaction and the communication that must take place among industry participants.
In order to mitigate risk, meet strict compliance requirements and profitability goals, lenders have to drive new processes, but they need other parties to come along. Being connected to the right people at the right times throughout the loan transaction is critical.
To do this securely and effectively, an electronic portal or document/data exchange is required. In addition, lenders are also feeling increasing pressure from investors to deliver final documents such as the recorded documents and the final title policy.
The answer to these and many other industry challenges, is to connect lenders and closing agents in a truly collaborative manner. Simplifile – long known for its dominance in the e-recording sector – has expanded its network to connect lenders to its nexus of closing agents, and counties.
Simplifile Collaboration enables lenders to share, receive, and validate documents and data with their network of settlement agents. This independent service gives visibility into settlement agent processes and provides a platform for collaborating on fee data, documents, and transaction details. Simplifile allows lenders to share changes, updates, deficiencies, and statuses within one system, making it easier to audit and ensure compliance.
With lenders now responsible for the closing process, visibility is more important than ever. Simplifile Post Closing provides the visibility lenders need into settlement agent processes along with the reception of recorded documents, fee data, and final title policy.
Their post closing service is organization, system, and closing type independent. Simplifile supports all closing types including paper, hybrid, and fully electronic closings.
Over 17,000 closing and settlement companies are part of the Simplifile network. In total, over 9 million transactions go through the system annually. Also, Simplifile’s network has coverage of over 70 percent of the population from the counties. At present, 25 title closing systems and 93 land record systems are integrated with Simplifile.
This powerful, agnostic and independent network already provides vast and deep relationships with closing agents and can now be leveraged by lenders to deliver critical collaboration (communication tools, document sharing, fee data sharing, notifications & alerts and audit trails) and post close tracking (recording and transfer tax fee estimates, recording status, estimated recording times, and electronic return of recorded documents and final title policy).
To address these challenges head on, lenders must collaborate with the right parties at the right time throughout the loan transaction to successfully navigate these new regulatory requirements while maintaining profitability. The time to connect lenders, settlement agents and counties is now.
About The Author
Paul Clifford is President of Simplifile. As President, Paul manages all aspects of Simplifile’s corporate strategy. Recognized as an e-recording industry founder, Paul frequently presents at state and national industry trade shows and conferences. Prior to founding Simplifile, Paul served as the Director of Corporate and Strategic Planning for iLumin Corp., where he was responsible for researching, modeling, and creating strategic business plans and projects, including an automated mortgage transaction initiative for Freddie Mac and Fannie Mae.