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PathSoftware Now Integrated With ComplianceAnalyzer From ComplianceEase

PathSoftware today announced that Path, its highly-configurable, multi-channel, cloud-based mortgage loan origination software (LOS), is now integrated with ComplianceAnalyzer with TRID Monitor from ComplianceEase, a provider of automated compliance solutions to the financial services industry.

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The seamless integration lets Path users automatically audit loans for regulatory compliance violations using ComplianceAnalyzer with TRID Monitor—without ever leaving the LOS. ComplianceAnalyzer with TRID Monitor is the most comprehensive, real-time TRID auditing solution available in the market. It can check for any changes in terms and fees throughout the origination and closing processes; audit tolerance across all disclosures and changed circumstances; and track post-consummation disclosures, including those with a cure to the borrower. In addition, ComplianceAnalyzer with TRID Monitor performs audits for Federal high cost and higher-priced loan regulations, the Secure and Fair Enforcement for Mortgage Licensing Act, state high cost and anti-predatory regulations, and state license-based consumer lending laws and regulations. It can also perform audits for compliance guidelines from secondary market investors and government-sponsored enterprises.

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Path was designed to simplify and streamline mid- to enterprise-level, multi-channel loan origination. All loan data, lock data, products, pricing, automated underwriting system findings, loan estimate and closing disclosure documents emanate and are reconciled within one system. In addition, the LOS’s configurable workflows, with role-based functionality, provide visibility into every loan at every stage—so financial institutions can ensure their business rules are followed.

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“We developed ComplianceAnalyzer with TRID Monitor to deliver in seconds comprehensive loan-level compliance reports supported by detailed regulatory and cure analyses, exception tracking and reporting,” said Dan Smith, Senior Vice President of ComplianceEase. “Our integration with Path will allow us to help more lenders improve efficiency, as well as give them greater confidence in the loans they’re originating.”

“Having the ability to automatically audit loans at every step in the origination, closing and post-closing process is vital in today’s ever-changing regulatory environment,” said Doug Mitchell, Director of Sales and Support at PathSoftware. “We’re pleased to partner with ComplianceEase to help our financial institution clients improve loan quality, reduce compliance risk, and capture the data needed to prepare for regulatory exams.”

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MRG Responds To Significant Growth By Hiring Industry Vet

Dallas-based MRG, a mortgage banking compliance organization, provides the mortgage industry a blend of compliance, unique and tailored document preparation, and technology, products, and services, is proud to announce the hiring of Chris Anderson. Anderson will be responsible for handling the increased demand for MRG’s products and services through new client acquisition and adding value to the existing client base by delivering an extensive array of best-in-class compliance solutions.

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Anderson has more than 20 years of account growth and management experience in the financial services and software industries. A former chief business development officer at Lending QB, Anderson played a significant role in expanding LendingQB’s footprint in the mortgage industry. Most recently, he served as executive vice president of sales at ISGN, a leading provider of loan servicing and default management systems for the residential and commercial lending industries. Anderson’s previous roles include executive vice president of sales and marketing at Docutech, a provider of compliant document solutions for residential lending, and general manager and business head for WIPO Gallagher, a provider of technology and business outsourcing services for the mortgage banking and lending industries.

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For more than 35 years, MRG’s highly respected staff of compliance experts has been providing lenders with legally defensible compliance expertise. Their unparalleled compliance solutions combine years of real estate law experience, in-depth compliance insights with state-of-the-art technology to document mortgage transactions. Their solutions provide industry leading built-in compliance checks to mitigate risk and alleviate compliance guesswork.

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“Given MRG’s significant growth, we needed a mortgage technology veteran who understands the constantly changing compliance landscape and the demands of today’s lenders,” said Mike Riddle, managing director of Mortgage Resources Group, LLC. “Chris has extensive experience in helping lenders respond to changing market conditions through the use of advanced technology. I am confident that Chris will apply those skills as we proactively work with our ever-growing client base.”

“The regulatory environment for today’s mortgage lender has become exceedingly complex, lenders are looking for solutions to ease their compliance burden,” said Anderson. “MRG has extensive legal expertise and best-in-class compliance solutions to meet those challenges head on.”

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The Future Of Digital Compliance

As everyone talks about the digital mortgage, executives at the Seventh Annual ENGAGE Event held in Denver, Colo, looked to broaden the conversation. They discussed the future of regulatory compliance in mortgage lending in a digital world. Here’s how they see things:

The burning question was: Will the coming digital mortgage reshape compliance? “It already has. Pre-2007 we didn’t think about compliance until after the loan was closed,” said Keith Kemph, Managing Consultant at CC Pace. CC Pace is a boutique business and technology consulting firm which has been serving the mortgage industry for 37 years. Early in Keith’s career, he was a Retail Branch Manager and later Regional Manager with Dime Banks, North American Mortgage. He went on to serve as Director at Merrill Lynch for seven years where he implemented numerous business and technology projects for the mortgage division. The last 10 years Keith has been consulting with executive management teams of mortgage vendors and mortgage bankers nationwide on strategy, process, and technology while successfully guiding organizations through change.

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“We didn’t have to. Now, we have to think about compliance at every step of the loan process,” continued Kemph. “We just went through ten years of chaos as we stitched together technology tools, our loan process and navigated our way through relentless new compliance measures. In our recent survey we found that lenders have formally transitioned from extremely cautious to optimistic. They are less on defense and more on offense, able to focus on the customer experience. However, while lenders feel like they can finally breath, they need to remain somewhat cautious as they map out and implement their digital mortgage strategy.”

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The landscape is becoming much clearer. “The CFPB came out with things like TRID, HMDA, etc. to really set the rules,” said Leonard Ryan, Founder and President of Laguna Hills, Calif.-based QuestSoft Corporation, a provider of automated compliance review software for the mortgage industry. Since the company’s founding in 1995, Ryan continues to oversee strategic planning and the day-to-day operations for the company including business and software development, interface partners, sales and pricing. Under Ryan’s leadership, QuestSoft has received Mortgage Technology’s Top 50 Service Provider Award since 2009 and was named a Top Workplace by The Orange County Register in both 2013 and 2014 out of over 10,000 applicants.

“So, the CFPB is telling you who should get a loan and who shouldn’t. They are setting the rules. In some ways they are reducing the industry to numbers. Now lenders have to work within those rules to differentiate themselves, and that’s where technology can play a role,“ added Ryan.

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As a a result, the future of digital lending compliance will include a greater emphasis on data and bringing compliance as close to the front of the mortgage process as possible. “Digital compliance is evolving into a process that is embedded into every aspect of the mortgage loan lifecycle,” noted Michael L. Riddle, the Managing Director of Mortgage Resources Group, LLC. He guides the teams within the firm that develop and deliver “best in class” compliant disclosure and documentation systems to single family mortgage lenders throughout the country. Mr. Riddle is the Co-Founder and Managing Partner of the Middleberg Riddle Group, one of America’s preeminent mortgage banking law firms and, in that role, has spent much of his 40 plus year professional career providing advice and legal counsel concerning regulatory compliance, enforcement and litigation to clients including banks, mortgage lenders, insurers and related financial service entities.

“Compliance will be essential. Further, compliance will be a key part of digitizing every part of the future loan process,” Riddle concluded. “Compliance will also be increasingly data driven. There will be no escaping embracing a more data-centric approach to mortgage lending.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Parsing The Data

While STRATMOR has always been a strong proponent of lenders using internal performance data to manage and improve their performance, according to senior partner Dr. Matt Lind, it is only by comparing peer-to-peer performance, i.e., benchmarking, that lenders will gain the most accurate and useful assessment of their competitive performance.

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“Mortgage lenders have utilized virtually the same metrics to assess performance for the past 30 years,” said Lind. “Considering how dramatically our market has changed during this time, STRATMOR felt it necessary to enhance the way lenders can measure performance versus peers. The result is a new approach, one based on a substantial lender-level data that enables lenders to place the efficacy of their operations in the context of peer performance on the same characteristics.”

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Lenders can apply STRATMOR’s new method for benchmarking production or servicing performance to virtually any traditional performance metric, from direct production margin and direct origination expense per loan to loans serviced per servicing FTE and more.

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“With common benchmarking comparisons, lenders are only able to make comparisons to the averages,” Lind continued. “This leads to statements like: ‘My direct retail origination expense per loan is $200 less than average,’ but with our new method, lenders can now determine how a value measures up or down in terms of standard deviations from the mean. The new method enables lenders to better judge performance, which is reflected in statements such as: ‘My direct retail origination expense per loan is equal to or better than 62 percent of lenders.’ The understanding gathered from statements like the latter are much more meaningful to our clients than the understanding derived from internal comparisons alone. The bottom line is that it is significantly more valuable for lenders to be able to measure against peers, rather than to simply measure against internal metrics.”

STRATMOR also details select findings from its 2016 LOS Technology Insight Survey (TIS), specifically, lenders’ opinions on the efficacy of functionality in their respective Loan Origination Systems (LOS). Less than 25 percent of lender participants indicated that the compliance tools in their LOS were ‘Highly Effective’ and afforded them a competitive advantage. Between 40 and 50 percent of participant lenders rated their LOS’ compliance functionality as ‘Adequately Effective.’

Additionally, STRATMOR’s TIS findings show ‘Lead Generation/Management’ as the lowest rated functionality. Only four percent of lender participants stated that their LOS provided ‘Highly Effective’ lead generation capabilities. ‘eSignature’ and ‘Product/Price/Eligibility Decision Engine’ capabilities were also among the lowest rated for effective functionality. A continued lack of functionality satisfaction in these important capability areas will most likely drive lenders to seek alternatives.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Are You Prepared For The Digital Lending Revolution?

You Need To Attend This Event To Be Ready. RSVP TODAY!

To all mortgage lenders and companies that sell products or services to the lending community this is one event you cannot afford to miss. While you are attending the MBA Annual Conference in Denver you should also attend this premier networking and information-gathering event. The Seventh Annual ENGAGE Event will deliver key insights into: the most effective ways to be ready for the digital mortgage lending process of the future, how to reach today’s borrowers, detail how digital processes will reshape regulatory compliance, explore the future of digital mortgage technology innovation, and much more.

Gain strategic insights that quite frankly you can’t get anywhere else. If you are serious about advancing your digital footprint to get a competitive edge, improving your sales results and truly understanding buyer behavior then this one-of-a-kind event is one you can’t afford to miss.

Don’t miss out. This event will take place from 2:30 p.m. to 4:30 p.m. at the Curtis Denver located at 1405 Curtis Street, Denver, Colorado 80202 on October 22, 2017. This is the time to engage, be enlightened and excel with PROGRESS in Lending Association as we look to the future of digital mortgage lending. Admission to the event is free.

RSVP NOW!

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Compliance Expertise Is In High Demand

Compliance experts are being sought out. For example, for over 35 years, Dallas-based MRG, a mortgage banking compliance organization, has provided to the mortgage industry at large a blend of compliance, document preparation and technology, products and services. To this end, MRG compliance expert Marsha Williams has been asked to share her extensive compliance expertise at the following upcoming industry events:

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Texas Association of Bank Counsel Convention – Bastrop, TX – September 20 – 22

“What’s Happening in Residential Mortgage Lending?”

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MBA Risk Management, QA & Fraud Prevention Forum – Miami, FL – September 24 – 26

“Construction Lending”:  Compliance and Risk Management”

In today’s constantly changing regulatory environment, MRG’s compliance expertise is in high demand. MRG’s team of compliance experts recognizes the business imperative of proactively monitoring and continuously analyzing regulatory changes, trends, and impending regulations that impact your business. MRG’s team of professionals is constantly on alert for changes from all federal, state, local and investor requirements to provide lenders with up-to-date compliance insights.

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As a lender, you should be focused on generating and maintaining a profitable business in this volatile market, rather than constantly worrying about the enormous and ever-changing regulatory landscape. Your burden is too great, and the risk is too high to rely solely on your internal staff to provide legally defensible compliance.

As a result lenders should turn to the experts that other leading providers and industry sources trust like MRG and others.

About The Author

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The Place For Thought Leaders And Visionaries

Finally Getting It Right

The CFPB’s announcement that it had finalized the long-awaited amendments to TRID, initially proposed in July 2016 and commonly referred to as “TRID 2.0,” was a welcome surprise. The industry had been calling for updates, both in the way of substantive changes as well as clarifications of numerous ambiguities in the rule, since TRID’s inception. With the finalization of TRID 2.0, the CFPB has at last answered those calls.

“While the yearlong delay since its initial proposal has been frustrating to many in the industry, I think it’s clear from reading through the final rule that the changes ultimately adopted, and the Bureau’s accompanying commentary, reflect a thorough and thoughtful consideration of all feedback received from consumers and industry in response to the updates initially proposed. The Bureau clearly took their time to try to “get it right,” and I think they should be commended for that,” said Michael Cremata, Senior Counsel and Director of Compliance, ClosingCorp.

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Headquartered in San Diego, Calif., ClosingCorp owns and operates the premier source of intelligence for closing costs and service providers in the U.S. residential real estate industry. Through innovative solutions, progressive technologies and strong alliances, the company delivers timely, accurate and transparent results that help optimize closing processes and services for mortgage lenders, title and settlement companies and real estate professionals. Clients rely on ClosingCorp to help improve efficiencies and mitigate risk.

“Some of the important changes made by the rule include: introducing a tolerance for the “total of payments” disclosure; clarifying requirements around the disclosure of construction and construction-permanent loans; expanding the exemption for certain housing assistance loans; and clarifying and revising various calculations in the “Calculating Cash to Close” table. All of these changes are helpful, and should be welcomed by the industry. However, there are a few areas where I believe the Bureau missed the mark.

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“One such area is the final rule’s failure to add meaningful guidance regarding the extent to which settlement service fees may be itemized on a Loan Estimate (LE) or Written List of Providers (WLP). While the initial proposal included a helpful clarification that fees for certain “packages” of settlement services may be aggregated, the Bureau decided to drop this clarification from the final rule in favor of a comment clarifying that lenders need not include on the LE or WLP “related fees . . . not themselves required by the creditor . . . such as a notary fee, title search fee, or other ancillary and administrative services.” Whether or not these fees are disclosed on the LE or WLP, though, the rule makes clear that they still must be included in tolerance calculations at closing if they fall in the “10% bucket.” Therefore, no lender would intentionally exclude “related” fees from the LE or WLP and thus suffer a smaller “baseline” for purposes of calculating tolerances (and that’s to say nothing of the context in which the fees are held to zero tolerance, in which case there’s no clarity at all as to how they would be treated for tolerance purposes).”

However, John Levonick, Director of Regulatory Compliance at Clayton Holdings believes that as the industry digs through the new 2017 TILA-RESPA Integrated Disclosure Rule (TRID), or TRID 2.0, compliance and quality control service providers are left scratching their heads about the complexity, and possible confusion, that the rule’s open adoption period is going to create.

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“Based on our preliminary review of the 560 pages of “clarifications” that make up TRID 2.0, many if not most of the changes ease more onerous obligations from a timing, data, tolerance, content or calculation validation perspective,” said Levonick.

“The TRID 2.0 rule has an effective date that is 60 days from the date on which it is published in the Federal Register. However, compliance with the rule is optional for creditors until the mandatory compliance date of October 1, 2018. This creates an open phase-in period from the publication date through October 1, 2018, whereby creditors are permitted to choose to handle certain origination practices and disclosures either (1) in the way that was in place prior to the TRID 2.0 effective date, or (2) in the way identified as appropriate in TRID 2.0. In other words, during this phase-in period creditors can selectively comply with whichever individual requirements within the original rule and the TRID 2.0 rule that they prefer. Good news for lenders; bad news for automated rules engines and QC personnel.

“From a technology standpoint, this will cause certain external automated compliance tools to falsely identify errors that prior to TRID 2.0 were “material” and are now no longer. Providers will then need to manually “clear” these non-material errors. Most of the TRID 2.0 changes will require only minor readjustments to current loan origination system configurations (although construction loans will require more). But even minor changes take development time. And, at the moment, with many lenders focused on the coming Uniform Closing Dataset (UDC), the TRID 2.0 changes—which will not be subject to enforcement liability until the October 1, 2018 mandatory compliance date—will not go to the head of the queue.”

The bigger question is how will the Secondary Market react to TRID 2.0? Will investors be concerned about liability, and whether consumers have a private right of action for errors arising during this 2017 TRID phase-in window? “This will remain an unknown, to be addressed on a case-by-case basis as issues are identified. While the CFPB has stated that its “clarifications” are not retroactive, what will become of pre-existing TRID errors that, had they occurred after TRID 2.0’s effective date, would not be TRID errors?” answered Levonick.

“In the meantime, we all continue to work through the new rule, hopeful that, in the long run, its clarifications will reduce confusion, lead to fewer errors in origination, and increase secondary market pull through on loan acquisitions,” he added.

Cremata agrees that TRID 2.0 has some flaws. “It’s disappointing (although not surprising) that the Bureau refused to address simultaneous issue rates, additional cure mechanisms, or the so-called “black hole” (although the black hole is the subject of a new proposal, released at the same time as the final rule, on which the Bureau is currently seeking comments).

“Overall, the finalization of TRID 2.0 represents a significant positive development for the industry. Although it fails (or declines) to resolve several of what have been the industry’s biggest pain points with TRID, it nonetheless introduces a number of much-needed clarifications and amendments, and is unquestionably a step in the right direction by the Bureau,” he concluded.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Paradatec Named Verified UCD Producer By Freddie Mac

Paradatec, Inc., a provider of Optical Character Recognition (OCR) solutions for mortgage file processing, announced that it is a verified technology integration vendor for Freddie Mac’s Loan Closing Advisor platform. Paradatec’s WriteUCD module was developed in accordance with Freddie Mac’s requirements for producing valid Uniform Closing Dataset (UCD) files.

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The UCD is a common collection of data that mortgage lenders will be required to deliver digitally to Freddie Mac and Fannie Mae starting on Sept. 25, 2017. This requirement is part of the Uniform Mortgage Data Program (UMDP), an industry-wide drive to build a better housing finance system in the United States.

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The WriteUCD module leverages Paradatec’s advanced OCR solution for the mortgage market to extract data from closing disclosure (CD) documents in mere seconds per page and then format that data in the required format.

According to Neil Fraser, Paradatec’s Director of US Operations, “We’re pleased to have obtained Freddie Mac validation as our clients need the assurance that they can meet the GSEs’ requirements well in advance of the September deadline. If a lender’s current loan origination system partner or document provider is struggling to produce a valid UCD file, they can sleep soundly knowing that Paradatec has them covered with our new WriteUCD module.”

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Paradatec also announces the release of their new AuditUCD module for auditing UCD file content against the closing disclosure contained in the UCD file. Fraser continues, “Since we’re building the UCD file from extracted closing disclosure data, it’s just as easy for us to unpack a UCD file’s content to compare the individual data elements against the values extracted from the submitted CD to verify the integrity of both components in the UCD file. Any elements that don’t match will be flagged in our XML output for further review and resolution. Given the volume of content that will be produced and need verification with this UCD initiative, our solution is uniquely positioned to offer a high degree of automation and operator efficiency.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

LenderLive Expands Its Compliance Services

LenderLive Services LLC, a division of LenderLive Holdings, Inc. (“LenderLive”), will now provide expanded compliance services through a new line of business: LenderLive Compliance Solutions. The new entity will offer both bundled and a la carte services to banks, non-bank mortgage servicers, credit unions, and other financial institutions. Maria Moskver, general counsel and enterprise compliance officer for LenderLive, will lead LenderLive Compliance Solutions.

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Over the past two decades, LenderLive Services has developed significant in-house expertise in regulatory compliance, operational controls, systems and industry best practices. The company maintains one of the most extensive template libraries, including origination documents for all 50 states, as well as borrower communications for loss mitigation, pre-foreclosure/default and general servicing. LenderLive is trusted by eight of the top 10 mortgage and financial companies in the U.S. for compliance and outsourced critical borrower communications.

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LenderLive will continue to offer its Compliance Solutions bundled with best-in-class fulfillment and document services, to enterprise clients.

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In addition, LenderLive Compliance Solutions will now give smaller companies the option to access its compliance solutions on an a-la-carte basis. This flexible approach will allow community banks, credit unions and regional banks to supplement their internal compliance resources with LenderLive’s proven expertise. These services include:

>>Ongoing regulatory monitoring and alerts for regulatory changes at federal and state levels.

>>Access and use of LenderLive’s wide-ranging state and federal template library.

>>Ongoing template updates and review services.

>>Client-focused webinars covering key servicing, loss mitigation and default topics.

Custom research and consulting on regulatory compliance issues, including operational and best practice perspectives, to accelerate implementation times.

“Historically, financial institutions have turned to LenderLive for turnkey solutions that have reduced costs and kept them compliant,” said Rob Clements, CEO of LenderLive. “What we are doing now is leveraging the embedded expertise we’ve developed and providing financial institutions these services in two distinct ways, helping to create greater efficiencies for every specific need.”

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The Place For Thought Leaders And Visionaries