CoreLogic Launches Enhanced Title And Closing Solution

CoreLogic has launched an enhanced title and closing solution for lenders incorporated into the industry standard Collateral Management System (CMS). The solution maximizes workflow efficiency around activity related to procuring title insurance, facilitating fee collaboration and streamlining closing tasks between lenders and all loan associated vendors.

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The Title and Closing Solution within CMS offers a seamless integration into TitlePort, which is a CoreLogic service provider facing platform providing connectivity to settlement agents and title providers to digitally accept orders and correspond with lenders via messaging or document transfer in a secure portal, eliminating email and providing compliance and peace of mind. The CMS and TitlePort workflow integration supports a standardized process, improves vendor relationships and communication while reducing closing turn time

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The cost and time invested in building and maintaining a vendor panel can be a burden for lender institutions to consistently ensure all practices are compliant and secure. The CoreLogic Solution within CMS supports vendor growth management through a digital invitation tool, powered by Vendor Headquarters (VHQ), for any size vendor, whether a lender managed panel or borrower chosen. The solution offers the ability to send requests to collaborate with your organization on TitlePort, manage the status of those requests and automate the boarding process into the CMS platform while maintaining a reportable trace of all activity.

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The Title and Closing Solution’s Fee Collaboration tool allows a lender digital platform to collaborate directly with settlement providers as early in the process as possible to more quickly and accurately provide final fees. The collaborative fee worksheet reduces the back-and-forth lag and inaccuracies by providing one document that both parties work within and review in real-time. The worksheet uses comparison visibility to aid in being able to quickly identify recent changes to speed up approval. Configuration capabilities allow exact fees to be recorded rather than estimates to increase client satisfaction at closing, and downstream work.

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“We couldn’t be more excited about this opportunity for lenders,” said Glen Evans, executive of Valuation Technology Solutions at CoreLogic. “Our Title and Closing Solution delivers lenders a comprehensive view into the title procurement, fee disclosure and closing package workflows, maintains a reliable and reportable audit trail within the system, and provides title and closing vendors with seamless connectivity to their lender clients’ platforms.”

For lenders who are currently part of the Collateral Management System (CMS) family, this solution is integrated into their CMS tool kit. The solution brings an established vendor panel, as CoreLogic has partnered with several national Title and Closing providers, including the big four underwriters.

Verus Mortgage Capital Completes $254 Million Investor Loan MBS

Verus Mortgage Capital (VMC), a full-service correspondent investor offering residential non-QM and investor lending solutions, has finalized its eighth rated RMBS (residential mortgage-backed securities) transaction for $254 million. The transaction was VMC’s fifth securitization in 2018. 

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The transaction was comprised of non-owner-occupied mortgages on 1-4 family properties. The securitization was rated by S&P Global Ratings and Morningstar, and is the second investor-only transaction by Invictus, an investment firm that backs VMC.

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“We are quite pleased with how we closed out 2018 and anticipate this year being even stronger in terms of the increasing interest in and demand for non-QM and investor loans,” said Dane Smith, President of VMC. 

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“Our focus remains on helping lenders grow their businesses with responsible non-QM lending and we are dedicated to purchasing quality loans as efficiently as possible,” Smith added. 

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Founded in 2015, Verus Mortgage Capital (VMC) is a non-QM correspondent investor backed by Invictus Capital Partners, a leading investment firm. VMC purchases loans in all 50 states and the District of Columbia and focuses solely on the non-agency market. It offers correspondent lenders a wide range of home financing products for credit worthy borrower.

The Washington, D.C.-based company, with operations located in Minneapolis, has purchased more than $4 billion in expanded, non-agency loans since its inception. In addition, through its affiliates, VMC has completed eight rated securitizations.

Churchill Mortgage Supports Homebuyers With New ‘Rate Secured’ Program

Churchill Mortgage has launched its “Rate Secured” program to lock eligible borrowers into an interest rate for 90-days after engaging with the lender, whether or not they have a home or property already selected. Churchill provides conventional, FHA, VA and USDA residential mortgages across 46 states.

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Homebuyers today are increasingly challenged by rising interest rates, which can entice them to prematurely purchase a home before they are ready or avoid entering the market altogether. Following the success of its Certified Homebuyer Program, Churchill has introduced its Rate Secured program to give borrowers increased peace of mind as they navigate the home buying process. If the borrower does not find a home within that timeframe, they can then easily reset the rate for another 90 days, and more importantly, if interest rates should decrease during the lock time, the borrower will receive the lower rate at closing.  

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“More than ever, borrowers need services such as these to help them make smarter mortgage decisions,” said Tom Gillen, SVP of Secondary Marketing for Churchill Mortgage. “Coupled with our Certified Homebuyer Program, Rate Secured allows borrowers to shop for their dream home with the confidence that their loan will close seamlessly, and at a rate they can plan around.”

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“In today’s rising interest rate environment, buyers are more hesitant to enter the market and are appropriately cautious towards any future changes” said Mike Hardwick, founder and president of Churchill Mortgage. “Through Churchill’s ‘Rate Secured’ program, we are empowering borrowers to better plan their home searches by eliminating any surprises relative to their financing – all of which helps ensure a smarter mortgage process and better borrower experience.” 

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Founded in 1992, Churchill Mortgage is a privately-owned company by its more than 350 employees. A full-service and financially sound leader in the mortgage industry, the company provides conventional, FHA, VA and USDA residential mortgages across 46 states. As heard on personal finance expert and author Dave Ramsey’s nationally syndicated radio show, the lender’s mission is to help borrowers achieve debt-free homeownership and build wealth through a smarter mortgage plan, regardless of their starting point. Churchill Mortgage is a wholly-owned subsidiary of Churchill Holdings, Inc.

Looking At OCR Use Cases In Mortgage Lending

With the costs to process each mortgage continuing to rise, lenders must leverage automation to improve profitability and consistency in their business processes.  With the right Advanced Mortgage OCR solution, mortgage companies have been able to reduce their level of manual document indexing and data entry activity, enabling them to process more loans per day at a lower cost per loan – yielding a leaner process and increased profit margins. 

Advanced OCR, More Than Just Reading Characters

An Advanced Mortgage OCR solution needs to do more than just convert document images to text.  Once converted, an advanced OCR solution should then be able to interpret that text using Semantic Analysis and artificial intelligence (“AI”) rules engines in a similar way a human being would process the content. Based on these results, documents can be automatically indexed and relevant datapoints extracted.  This information is then passed to downstream applications for appropriate routing, and archival. 

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A Technology Vendor with a Unique Approach

For today’s most advanced OCR solution, the OCR process begins with a full-page OCR scan of each image.  This step is unique and typically completed in less than one second per page.  An extremely high-speed OCR process is critical and yet difficult for many vendors to achieve.  It is this performance, which allows every word on the page to be included in the scope of the AI rules engine analysis, just as a human being would interpret the content.  This content evaluation process is unique in terms of the combination of speed and ability to include allpage content in the evaluation scope, thereby making it extremely flexible with documents of varying layout (for example, bank statements).  

OCR in Action Use Cases from Leading Lenders

>>TRID Capture and Audit

The ideal OCR solution provides a rigorous tool for a comprehensive review of each TRID transaction. Typically, during the origination process there are several iterations of both a Loan Estimate and a Closing Disclosure. The most efficient TRID Audit solution is able to extract every data element from all initial and re-disclosed Loan Estimates and Closing Disclosures. The system can be configured to either output all of the data from each document iteration, or output just the differences found from the prior document. Output formats should include MISMO v3.3 or custom XML schemas. 

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In the case where a loan origination system is generating the TRID disclosures, this differential reporting may be something produced by the LOS itself. However, in the correspondent lending channel, or in the case of a split, “borrower-only” and “seller-only” Closing Disclosure transaction, this Advanced OCR solution closes a gap that the LOS is unable to address. 

In these cases where the lender’s LOS does not generate all iterations of the Closing Disclosure and Loan Estimate, a solution is needed that can natively read PDF or scanned TIFF versions of these documents. This type of TRID Audit solution has been developed and tested to support any layout of these documents from any source.

>>UCD Creation and Audit

The Uniform Closing Dataset (UCD) provides a common industry dataset to support the Consumer Financial Protection Bureau’s (CFPB) Closing Disclosure and its ability to be communicated electronically. 

Loans closed on or after September 25, 2017 which are acquired by the  GSEs are required to have both a UCD XML file and after June 25, 2018 an embedded PDF of the associated Borrower Closing Disclosure. 

Over time the UCD is intended to provide the following benefits:

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A. Greater data consistency by promoting better and more efficient data integration and exchange between business partners.

B. A common understanding, as all parties use a consistent approach and language to describe the information on the Closing Disclosure.

C. Improved data accuracy by eliminating the need for proprietary formats that can be costly to maintain and can lead to misinterpretation of the data.

The GSEs are collecting UCD data because it:

A. Helps enhance credit risk management with more data and better quality data.

B. Provides important information to help increase their ability to detect fraud and misrepresentation at loan delivery.

C. Provides additional transparency into the mortgage loan transaction file to help assess whether the loan, as closed, meets the GSE’s eligibility requirements.

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According to the GSEs a PDF of the Closing Disclosure needs to be embedded in the UCD because, “The Borrower Closing Disclosure is the definitive record of the fees, charges, and adjustments that occurred in the loan transaction. As such, it is used to validate that the information provided in the UCD submission is complete and accurate.”

July 2018 UPDATE: As the new requirement for embedding a PDF of the Borrower’s Closing Disclosure was beginning to rollout, leading solution providers engineered a solution to perform an audit to statistically measure the accuracy between the data found on the embedded PDF and the MISMO XML data found in the UCD.  

The right solution provides the tools to determine if the data on the embedded PDF Closing Disclosure source document actually matches the same data within the UCD XML file. While this capability is certainly valuable to GSE entities, it is also possible to use this audit for other loan transfers.  As part of a due diligence process, investors may use this capability to verify that a set of loans to be purchased is as advertised and all critical metadata provided is accurate.

>>HMDA Audit

In order to promote compliance with federal consumer protection laws, lenders are required to submit certain borrower demographic data to the federal government. HMDA (Home Mortgage Disclosure Act) disclosures provide the public with information on the home mortgage lending activities of most lenders.

One of the challenges for a lender in reporting HMDA data is to ensure that the documents from which data is pulled are, in fact, the final versions. Many times errors in HMDA reporting are due to reporting data based on a non-final source document.

The most advanced OCR solution for HMDA Audits searches through an image archive for every version of every document relevant to the HMDA reporting process and automatically determines the final versions. Data is then automatically captured from these final documents via their AI data extraction rules and coalesced into an XML file or spreadsheet to be used for reporting. 

This process provides lenders with a highly automated method for assuring accuracy of required Loan Application Register (LAR) reporting data and to ensure database of record quality for future reporting needs.

What’s New in 2018?

>>OnDemand OCR capture (W2s, Paystubs, and Tax forms)

As the industry continues to look for faster and more efficient ways to capture key data from prospective borrowers, a leading OCR provider has been listening.  Their sub-second speed OCR is the ideal technology platform from which to allow borrowers, loan officers and others to submit supporting loan documentation for quick automated document identification and data field capture.

A user may drag a PDF of their Federal IRS 1040 Income Tax form to a browser-based app, the form will be identified and all data fields captured in a short time frame and immediately available to loan officers and loan origination systems.

>>Necessary but Unique Capabilities

The key capabilities and features of the Paradatec Advanced OCR solution that make these use cases possible are:

A. Sub-second per image full OCR processing

Paradatec advanced indexing and data capture technology is at least 10 times faster than others, which allows them to take an approach others would like to, but just can’t because of their system performance. This capability is unique, and enables Paradatec to evaluate all text on every page, just as a human can but much faster. 

B. Extreme scalability with a small hardware footprint 

Paradatec’s Advanced OCR solution scales from the ability to process over 1,000,000 images daily on a single eight core server to tens of millions of images daily by simply enlisting additional cores into the configuration.

C. Pre-built mortgage OCR library

Over 500 mortgage document types ready to be indexed, and more than 6,000 mortgage loan data fields able to be captured right “out of the box”.  

D. Web services API

Paradatec’s OnDemand OCR feature extends their Advanced OCR capabilities to other applications through seamless integration with a web services API.

E. Document versioning

Documents can be stacked, with like documents consolidated together, to streamline the document versioning process.

F. Bookmarked PDF output

Paradatec’s WritePDF module provides a bookmarked and annotated PDF of the submitted loan package, including a table of contents with links to key data elements within the package.  Clients find this feature invaluable and a significant documentation addition to their inventories of mortgage loans.

Paradatec’s Advanced Mortgage OCR solutionis designed to make mortgage lending faster and more accurate.   In 2017, Paradatec’s Mortgage OCR solution processed over 1,500,000,000 images (representing over 2,500,000 loans), helping lenders and servicers streamline their origination, onboarding and compliance obligations by automating document indexing, automating data extraction, meeting tighter service level agreements, and delivering more accurate data much faster than manual data entry alone. In 2018, Paradatec is on track to again exceed the volumes processed and the automation provided to their lender, servicer, and other technology provider clients in the mortgage lending industry.

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Driving Factors For Change

In response to “The Great Meltdown,” the passing of Dodd Frank created a totally new regulatory agency the Consumer Financial Protection Bureau (CFPB) with broad regulatory and enforcement power and the bureau’s name was clear. Their primary focus is all about how lenders should treat their customers (consumers) and it introduced and imposed many new workflow requirements as to how this should be accomplished. Major regs like QM, TRID, HMDA and UCD have greatly impacted lenders, but the response to this has driven, many new products and workflows to support them. 

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GSE’s Driving the Process – Move to collecting more and better data 

As the saying goes, “Whoever has the gold makes the rules” and when it comes to what drives future trends I always look for what the investors require to package and sell them loans as you are not going to originate a loan that cannot be purchased by them to ensure fungibility 

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Automated data verification services

Partially in response to above the GSE’s jumped on board with their Uniform Mortgage Data Program (UMDP) that is utilizing MISMO data standards to introduce more automated, direct to the source (VOI, VOD, VOE) system to system data validation and verification services to reduce origination time and steps and secondary market risk. With new automated workflow products such as Freddie Mac’s Loan Quality Advisor and Fannie Mae’s Day One Certainty they are continually perfecting the model to eliminate steps, requirements and streamline the process from the traditional, linear paper verification mortgage process and putting enhanced reps and warrants around this as further inducement to implement and adopt. 

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Collecting more data upfront in the process and being able to validate it sooner results in processing and closing good loans sooner and shrinking the time to close. 

Move from a post-Closing to pre-Closing automated QC review 

Also supporting above trend, the three-day delivery requirement of the Closing Disclosure (CD) of TRID along with the GSE’s Uniform Closing Data Set, (UCD) mandate provides a huge benefit to ensuring the quality of loans pre-closing Vs post-closing. This will finally drive the value prop of eClosing as that will be the only way to ensure data and document compliance and integrity because if you paper out at closing you lose the entire benefit of maintaining a complete electronic audit trail (evidence of compliance) because you have no way of knowing what changes were made at the closing table if now leave the electronic system of record, (eVault) that captures any and all changes made to the disclosures and paper out. 

Competition for the consumer – Mining the Gol

Speaking of gold, just like the gold rush the forty-niners went to where they thought the gold was and in today’s world it’s online. Online is where the consumers are. The technical power of Smartphones, tablets and much improved transactional web sites to attract consumers eye balls, interaction and stickiness to keep them engaged and coming back for more have advanced the focus of technology to capturing consumer clicks at Point of Sale, (POS).

Creation of the new “Fintech’s” to “E”nhancing the consumer “E”xperience

With silicone valley investments and ability to develop with newer web services technology, the legacy LOS companies were slow to recognize and seize upon the opportunity to capture the consumer at the get go.  At time of application or Point of Sale, (POS). 

This has launched the creation of “Fintech” companies to create more intelligent, logical and consumer friendly UI’s at POS.  As use and demand grows for them they will continue to evolve and expand their functionality to support a full end-to-end Digital <Mortgage process. 

Drive to a ten-day close and a ten-minute closing 

Another result of capturing more data sooner is the ability for intelligent AI and machine learning systems to automate more of the routine decisioning that underwriters make. With machine learning you can build mortgagebots behind your consumer UI’s to handle the most routine, rote questions and automate responses and with AI you can mimic and continue to optimize the results of your best underwriters to ensure consistency of results across the enterprise. The real power of these systems is that they are constantly updating and learning so with every instances and response they will provide even better and more intelligent responses over time.

Blockchain Vs. eVault

Like so many of us in this business, because there are so many touch points and multiple people (both internally and externally) having to sign-off and agree on implementing something new, technology innovation, adoption and progress happens slowly in our space. But that does not preclude us for looking at the next shining object. Blockchain is one of those objects.  If we looked back in history within the mortgage space, the long list of hot technology buzzwords and acronyms that were once big news, are no longer even talked about.  

The formation of MERS and the GSE’s embracing eMortgages eVaults have existed for some time and have the legal infrastructure to support capturing the full electronic chain of evidence of events to provide a full electronic date and time stamp audit of key milestones and transactions to prove compliance.  Early on and to this day many people only believe the reason you need an eVault is to support the secure registering of a SMARTDoc® eNote with MERS, but it can and should be to provide a full electronic accounting, tracking and evidence of consumer compliance across the entire mortgage process to protect against future audits or anyone contesting the legal validity of the loan downstream. From loan application to servicing. 

SMARTDocs® Vs Smart contracts. 

Blockchain is also held up as the “new” solution to ensure the security and sanctity of the data. But one of the real values of implementing intelligent SMARTDocs® today is that any data on the document can be authenticated, shared and secured (tampered sealed) down to the field level so why wait for a totally different technology when eVaults have the legal vetting and investor acceptance to solve that need today. 

Investors acceptance of eNotes
Yes.  We’ve been talking about an end to end paperless eMortgage process for years and the GSEs have been successfully promoting it, but Dear Investor Community, it’s time to step it up and accept eNotes already!  For those that do there is a lot of pent up demand with most of our clients still doing hybrids as they currently do not have an investor take-out to purchase eNotes.  But it’s coming soon and for those that are ready to step now, (price being the same) it’s going to hard for the Johnny-Come-Lately’s to participate because once that correspondent is electronically lock in and happy with the investor that worked with them to provide it sooner it’s going to be hard to come in later and displace them.

MISMO driving standards and adoption 

Finally, all the above would not make sense unless there was some sort of data standard that can capture and interpret the data in a common structure and terminology that makes sense to all systems across the mortgage manufacturing process that need to share and utilize it. MISMO has moved from being just a data standards group to now looking into how those standards can solve real business problems for lenders. Work groups like the Fee terminology, Doc Classifications, RON, Standard Closing Instruction Letter, Verifiable SMARTDoc® eNote, Third Party Risk Assessment, Electronic Evidence and the list goes on. All the trends and initiatives to above have incorporated MISMO to ensure the data, loan quality and most importantly compliance of the information that is shared across systems. 

Now that it appears at least for the time being that the CFPB has backed off from enforcement lenders have some time to take a collective breath and really look at doing some innovating and implementing technology strategically rather than the reactive and piecemeal approach to responding to the flurry of regs that have been inundating them for the last few years. Lenders only need to look at the rapid growth of a previous income tax technology company called Quicken to become the number one originator in the country to see how making it easier for consumers to do business with them Vs. the old, traditional, antiquated mortgage process to see who’s driving innovation and adoption in this space.

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Improve Vendor Management With Data Consolidation And Tracking Software

Lenders are constantly reviewing important pieces of data, typically from multiple vendor sources, in order to make critical lending decisions regarding borrowers or their pieces of property. This often results in miscommunication, lost files and the use of inappropriate vendors for unique scenarios.

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Luckily, there have been major advancements in the world of reporting, including the perfection of software tools that allow third-party companies to collect vendor data and display it in ways that are easy for employees to consume. Those employees are then better able to effectively guide their lender customers to the best course of action regarding the vendors they use.

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For instance, one of the biggest complaints that borrowers often have with their lender is that the appraisal process takes far too long. Especially in today’s world of instant gratification, no one is happy about waiting weeks to hear if their loan has been approved.

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So, if an appraisal from a certain vendor took an unusually long amount of time, a third-party employee can use this reporting software to determine if this is a one-off scenario that occurred due to unexpected factors, or if it is actually part of a larger trend with that particular vendor. If the vendor is performing positively the majority of the time, no changes need to be made. However, if the data indicates a larger trend of poor performance, the employee must then alert the lender and help him make an appropriate decision about using better vendors in the future.

Because of this, it is important for third-party companies to first focus on internal reporting so that they can ensure they are doing the best possible job for their lender customers. When evaluating these reports, employees may note things like a vendor consistently slacking on turn times or a lender that is lending in an increasingly wide footprint. Upon seeing things like this, the company can provide its guidance on what alternative vendor options they may have.

And, just because a vendor is flagged for one customer does not mean it is flagged for all customers. Not all vendors are great performers in all areas; one may be a top performer in California but fail miserably on the East Coast. It is up to the third-party company to ensure that each of its customers’ unique requirements are met at all times.  

Of course, a reporting solution from a third-party provider is of no use if the provider is not adamant about staying up to date on compliance expectations. As lenders know better than anyone, the home equity and refinance industry is no stranger to ever-changing rules and requirements. By partnering with a company that can easily update its software as soon as laws or industry standards change, lenders save a lot of time and greatly reduce the risk of costly mistakes.

Reporting and analyzing data is truly the best method of vendor management. If a third-party provider has a lender customer that wants to change vendors, that provider should be able to effectively and efficiently collect data on the vendor and present it to the lender to either enforce or dispute their concern. It is vital to avoid making a vendor change based on an isolated incident that could actually make the problem worse.

An all-in-one solution to consolidate settlement services and aggregate vendor management, as opposed to the traditional model of ordering title, valuation and flood reports from different vendors, is critical for lenders to be flexible, successful, and to maintain positive relationships with their borrowers.

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