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Mortgage Cadence Enhances Enterprise Lending Center Through Integration With Radian

Mortgage Cadence, an Accenture company, has integrated Radian’s mortgage insurance service into its Enterprise Lending Center solution, further expanding on-platform access to top-tier services.


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Enterprise Lending Center (ELC) facilitates lending in all forward and reverse mortgage channels and across all mortgage products, including home equity. Through the Radian integration, Mortgage Cadence clients can quickly obtain Radian MI rate quotes, order insurance, and receive order status updates without ever leaving ELC.


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“At Mortgage Cadence, our goal is to help our clients connect to the providers they want to work with and operate at optimal efficiency,” said Brian Benson, executive manager of services at Mortgage Cadence. “This integration extends our provider network and offers direct, on-platform access to Radian’s mortgage insurance services.”

The integration centralizes all data and documents related to the mortgage insurance transaction and stores this information within ELC to avoid rekeying of information from external sites. This single-system approach benefits lenders by eliminating the risk of human error, reducing labor and accelerating loan closing.


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“Radian’s integration with Mortgage Cadence is a testament of our commitment to making it easier for our customers to do business with us,” said Brien McMahon, chief franchise officer, Radian. “With this integration, customers can obtain accurate Radian MI rate quotes with greater speed and accuracy, while continuing to focus on their business.”

Integrations That Make Sense

As we all know, lenders have a lot of needs that can’t be fulfilled by any one vendor. So vendors have to integrate to help their clients. For example, Mortgage Cadence, an Accenture company, has integrated Radian’s mortgage insurance – (MI) service into its Enterprise Lending Center solution, further expanding on-platform access to top-tier services.


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Enterprise Lending Center (ELC) facilitates lending in all forward and reverse mortgage channels and across all mortgage products, including home equity. Through the Radian integration, Mortgage Cadence clients can quickly obtain Radian MI rate quotes, order insurance, and receive order status updates without ever leaving ELC.


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“At Mortgage Cadence, our goal is to help our clients connect to the providers they want to work with and operate at optimal efficiency,” said Brian Benson, executive manager of services at Mortgage Cadence. “This integration extends our provider network and offers direct, on-platform access to Radian’s mortgage insurance services.”


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The integration centralizes all data and documents related to the mortgage insurance transaction and stores this information within ELC to avoid rekeying of information from external sites. This single-system approach benefits lenders by eliminating the risk of human error, reducing labor and accelerating loan closing.

“Radian’s integration with Mortgage Cadence is a testament of our commitment to making it easier for our customers to do business with us,” said Brien McMahon, chief franchise officer, Radian. “With this integration, customers can obtain accurate Radian MI rate quotes with greater speed and accuracy.”

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.

Mortgage Cadence Enhances Its Enterprise Lending Center Platform

Mortgage Cadence, an Accenture company, enhanced its Enterprise Lending Center (ELC) loan-origination platform by providing additional integration capabilities with Mortgage Guaranty Insurance Corporation (MGIC). The two new ELC features — electronic loan package document delivery and automated mortgage insurance activation, both from MGIC — streamline the origination process by simplifying the ordering and activation of mortgage insurance, resulting in greater speed and productivity for lenders.


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For non-delegated mortgage insurance, the electronic loan package document delivery capability gives lenders the option of sending the loan package directly to MGIC for review, eliminating manual document uploads.


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Lenders can also activate the mortgage insurance policy by notifying MGIC electronically after loan consummation.  MGIC is one of the first mortgage insurance providers to extend this service via integration with a loan-origination system, and Mortgage Cadence’s ELC platform was the first loan origination system on the market to provide this integrated functionality.


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“The activation of mortgage insurance after a loan closes is often a grey area,” said Brian Benson, executive manager of services at Mortgage Cadence. “Sometimes it’s the lender that activates the insurance, while other times it’s the servicer. Enterprise Lending Center now automates this activation, creating efficiency and peace of mind for lenders.”

Margaret Crowley, MGIC’s vice president of marketing and customer experience, said, “Through the simple click of a button within the Mortgage Cadence loan-origination system, lenders can automate the document loading process, saving time and streamlining the process of ordering and activating mortgage insurance. We are always looking for ways to make things easier for our customers, and we’re excited about this integration with Mortgage Cadence.”

Compliance Auditing And Monitoring Matters

Lenders can’t forget about compliance. But technology vendors are helping. For example, Mortgage Cadence, an Accenture company, has integrated ComplianceAnalyzer, a compliance solution from ComplianceEase, with the Enterprise Lending Center (ELC), Mortgage Cadence’s proprietary loan-origination platform. The integration enables ELC users to systematically audit loans for regulatory compliance without leaving the platform.

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ELC facilitates lending for forward and reverse mortgages in retail, wholesale and correspondent lending channels and across a multitude of mortgage products, including home equity lines of credit. The integration of ComplianceAnalyzer provides a comprehensive, real-time auditing and monitoring solution within the ELC.

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“The cost to produce a loan has been on the rise, largely because of compliance demands that have given way to inefficiencies and slower speed to close for many lenders,” said Trevor Gauthier, Mortgage Cadence’s president and chief operating officer. “Mortgage Cadence is committed to providing lenders with the tools to help solve for these increased compliance demands, and our integration with ComplianceAnalyzer will do just that.”

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ComplianceAnalyzer enables lenders of all sizes to improve asset quality and value, reduce compliance risk, negotiate better execution with secondary market investors, and capture the data needed to prepare lenders for regulatory exams. The solution 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, as well as compliance guidelines from secondary market investors and government-sponsored enterprises. It also performs TRID, RESPA 2010 and pre-2010 forms tests to validate California’s per diem interest calculations, a key differentiator in the market, as compliance for California originators remains a top priority to avoid penalties and fees.

“Our automated loan-level compliance technology helps lenders comply with federal and local regulations and minimize operational risks,” said John Vong, ComplianceEase’s president. “We’re pleased to partner with Mortgage Cadence to help more lenders improve loan quality, reduce risk and increase profitability.”

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.

Now What?

Over a year in the making, TRID 2.0 was finally released on July 7, 2017. With an effective date 60 days after the final rule is published in the Federal Register, and a mandatory compliance deadline of October 1, 2018, the industry is sure to have a lot to say about these new regulations.

TRID 2.0 is meant to provide additional clarity to the original TRID rule that went into effect on October 3, 2015. Changes include:

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Cooperative Housing. Loans on cooperative housing are now covered by TRID, having previously been left to state law definitions of real and personal property.

Tolerances. New tolerances have been added and others have been clarified, including total of payments, the “no tolerance” category and good faith, and property taxes.

Rate Locks. A new Loan Estimate, or Closing Disclosure, must be provided upon rate lock, even if nothing has otherwise changed.

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Escrow. The Closing Disclosure Escrow Account Disclosures have been clarified, allowing for 12 months in “Year 1” calculations.

Additional Guidance. The amendment provides additional guidance around disclosure of construction to permanent loans, simultaneous second loans, disclosure of principle reductions, and a reiteration that re-disclosure of the Loan Estimate (LE) or Closing Disclosure (CD) is permitted at any time.

What’s Missing?

The CFPB has not yet finalized proposed changes to resolve the infamous “black hole” issue; instead, they published a new proposal. In case you’re unfamiliar, complications arise due to potential timing conflicts between the Loan Estimate and the Closing Disclosure. If a borrower experiences a change in circumstance after they have received the Closing Disclosure and needs to delay the date of closing, there are concerns that a lender will be unable to comply with both the requirements to provide a revised disclosure to the consumer within 3 business days of the change and simultaneously within 4 business days of consummation in order to reset the tolerance thresholds for the good faith determination. There is even uncertainty of the ability of a re-disclosed Closing Disclosure to reset tolerances at all. Can we expect a final TRID 3.0 to resolve the issue? Only time will tell.

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Similarly, the issue of disclosure of simultaneous title quotes for owner’s and lender’s title premiums remains unchanged and unaddressed. The current, and very complicated, method of calculating lender’s title in the case of a simultaneous quote still stands and is not currently included in the “black hole” proposal.

What Happens Next?

Our main concern after dissecting TRID 2.0 is the phased implementation. On the surface this sounds like a great thing for lenders, but what happens when a consumer compares disclosures between lenders? This gets tricky when it comes to the application date. Additionally, you don’t want to change to the new calculations in the Calculating Cash to Close table mid-loan cycle with your consumers. This would result in re-disclosed Loan Estimates, or the Loan Estimate and Closing Disclosure on a single loan may utilizing different logic. This could confuse consumers as well as investors on loan purchase, and examiners down the line.

Regardless of the outcomes our industry will adjust. One thing is for sure, policies, procedures, and technology will continue to play an essential role in mortgage compliance.

About The Author

Amanda Phillips

Amanda Phillips is EVP Legal and Regulatory Compliance for Mortgage Cadence, an Accenture Company. She works closely with Mortgage Cadence Product and Development teams to help interpret compliance requirements and assist in developing risk mitigation strategies and implementing the requisite controls within the Mortgage Cadence platforms. She also communicates with clients regarding Mortgage Cadence compliance interpretations and controls. Phillips joined Mortgage Cadence in January 2014 as its Legal and Compliance Lead, guiding development of the organization’s technologies, including the Enterprise Lending Center, the Loan Fulfillment Center and the Document Center.

Lenders Are Moving Forward

In covering the mortgage space for more years now I’ll admit, I’ve always been concerned about how slowly this industry moves. In recent months however, I have heard of lenders making some technology moves.

For example, to modernize its mortgage lending operation, Tinker Federal Credit Union (Tinker) has selected the entire product suite from Mortgage Cadence, an Accenture (ACN) company.

With the full Mortgage Cadence product suite, including Loan Fulfillment Center, Borrower Center, Imaging Center and Document Center with integrated eSign capabilities, Tinker will be able to provide its customers with an entirely paperless and seamless end-to-end mortgage process, from application to closing.

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“We owe our members the most convenient, transparent and intuitive lending experience available on the market today – and Mortgage Cadence’s product suite makes this a reality for us,” said Connie Wall, Tinker’s senior vice president of Lending.

Borrowers today expect a highly automated digital experience layered with the human-to-human connection that creates a highly personalized yet efficient experience. By enabling lenders to streamline the delivery of loans to their borrowers through a fast, easy and intuitive platform, the Mortgage Cadence suite of loan origination technology solutions will empower Tinker to deliver on its brand promise of providing customers with an exceptional borrower experience.

“This is exactly the kind of collaboration we had in mind when we founded Mortgage Cadence in 1999,” said Trevor Gauthier, Mortgage Cadence’s President and Chief Operating Officer. “Tinker needed better technology, seeking a comprehensive platform to serve its needs well into the future. I’m very pleased that Mortgage Cadence will be that platform provider and excited about the success we expect Tinker to enjoy for years to come.”

Tinker Federal Credit (TFCU) is the largest credit union in Oklahoma, with over 360,000 members and more than $3.6 billion in assets. For over 70 years, the institution has been helping its members achieve their goals and realize their dreams. As a not-for-profit, member-owned financial cooperative, TFCU returns profits to its members through financial education, competitive loan and dividend rates and low or no fees on service.

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Similarly, Pacific Union Financial, LLC, a government lender has partnered with Ellie Mae to leverage Ellie Mae’s Encompass. This new technology will enable joint customers to deliver loan data and documents in a streamlined, efficient, and secure manner.

This new process helps facilitate loan data and document delivery directly from Encompass to Pacific Union instantaneously. Joint customers will experience a seamless, simplified workflow to help ensure that the information is accurate, organized, and securely transmitted. Going forward, the process with Encompass will eliminate the need to download and upload loan data in multiple locations, and instead provide a seamless transfer of data and documents directly from Encompass to Pacific Union Financial.

“Through our partnership with Ellie Mae, we will improve our efficiency by offering a secure, seamless data and document delivery workflow from their system of record,” said Warren Little, Chief Technology Officer at Pacific Union Financial. “We look forward to working with Ellie Mae to offer digital mortgage solutions that enhance customer service and business operations.”

“At Ellie Mae, our mission is to provide our lenders and partners with a true digital mortgage, which encompasses everything from consumer interest through loan delivery,” said Parvesh Sahi, Senior Vice President at Ellie Mae. “We are excited to partner with innovative lenders like Pacific Union Financial, who share our vision of leveraging automation in order to improve the process while also ensuring the highest levels of compliance, quality and efficiency.”

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Pacific Union Financial, LLC is a full-service mortgage company located in Irving, Texas, with fulfillment centers in Texas and California and over 50 branches across the country. We originate and purchase residential mortgage loans through Wholesale, Retail, and Correspondent channels in addition to servicing a $26 Billion portfolio. Pacific Union Financial offers white glove service for borrowers with best to bruised credit.

And lenders aren’t just looking to swap out cote systems, they have their eye on a more digital process. For example, DocMagic, Inc., a provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that Deutsche Bank has successfully implemented and is actively utilizing its proprietary eVault technology.

“Deutsche Bank has an international footprint in multiple forms of lending and servicing, and having a company of their size select our eVault to safely and securely store sensitive loan documents speaks volumes about the bank’s confidence in our technology,” said Dominic Iannitti, President and CEO of DocMagic, Inc. “We are very pleased to partner with Deutsche Bank on a long-term basis to help achieve its servicing goals with our eVault.”

Using the DocMagic eVault, Deutsche Bank’s document custody group is now empowered to take full possession of electronically originated assets for clients as the loan market continues to transition to a paperless process. DocMagic establishes a legally compliant method to securely move original electronic files from one custodian to another, while preserving unique authoritative digital ownership.

Further, the eVault ensures authentication of original documents passing between owners, irrespective of how many duplicate electronic files there may be of the same record. The repository system within DocMagic’s eVault relies upon digital tamper-proof seals and a detailed, well-documented audit trail that ensures compliance and provides detailed reporting.

DocMagic also made available to Deutsche Bank the ability to leverage a unique dual-option solution that accesses its on-premise eVault installation to provide a gateway to seamlessly and securely connect to MERS via any browser, as well as by way of a direct VPN connection.

As a result of partnering with DocMagic, Deutsche Bank is now well-positioned to easily, compliantly and securely service loans housed in the eVault, creating newfound efficiencies and a competitive advantage for the bank. By providing eVault services to Deutsche Bank’s clients, they further cement themselves as a leader, innovator and provider of excellence. DocMagic’s eVault has been thoroughly vetted and is officially approved by Fannie Mae, Freddie Mac, and MERS to compliantly support eVaulting services.

So, lenders are moving forward when it comes to embracing technology. Are they moving fast enough? In my opinion, no. However, progress is progress. Things are improving. My only hope, as always, is that lenders would move faster.

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.

The Largest Credit Union In Oklahoma Makes A Big Technology Move

We are hearing from a source at NexLevel Advisors that to modernize its mortgage lending operation, Tinker Federal Credit Union (Tinker) has selected the entire product suite from Mortgage Cadence, an Accenture (ACN) company.

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With the full Mortgage Cadence product suite — including Loan Fulfillment Center, Borrower Center, Imaging Center and Document Center with integrated eSign capabilities — Tinker will be able to provide its customers with an entirely paperless and seamless end-to-end mortgage process, from application to closing.

“We owe our members the most convenient, transparent and intuitive lending experience available on the market today — and Mortgage Cadence’s product suite makes this a reality for us,” said Connie Wall, Tinker’s senior vice president of Lending.

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Borrowers today expect a highly automated digital experience layered with the human-to-human connection that creates a highly personalized yet efficient experience. By enabling lenders to streamline the delivery of loans to their borrowers through a fast, easy and intuitive platform, the Mortgage Cadence suite of loan origination technology solutions will empower Tinker to deliver on its brand promise of providing customers with an exceptional borrower experience.

“This is exactly the kind of collaboration we had in mind when we founded Mortgage Cadence in 1999,” said Trevor Gauthier, Mortgage Cadence’s president and chief operating officer. “Tinker needed better technology, seeking a comprehensive platform to serve its needs well into the future. I’m very pleased that Mortgage Cadence will be that platform provider and excited about the success we expect Tinker to enjoy for years to come.”

Featured Sponsors:

 
Tinker Federal Credit (TFCU) is the largest credit union in Oklahoma, with over 360,000 members and more than $3.6 billion in assets. For over 70 years, the institution has been helping its members achieve their goals and realize their dreams. As a not-for-profit, member-owned financial cooperative, TFCU returns profits to its members through financial education, competitive loan and dividend rates and low or no fees on service.

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.

Can Mortgage Collaboration Be Safe Again?

Email is everywhere. Everyone uses it, and it’s generally accepted as part of everyday life. If you aren’t accessing email on your desktop, you’re most likely connected instantly through your phone. Whether for business or personal use, this is how almost everything gets done. From meeting invites to news alerts, purchase receipts to run-of-the-mill emails from family, seemingly all major transactions in life are touched by this communication method, including the mortgage process. People spend anywhere from 4-6 hours a day on email – and whether you agree or not that this is a good use of time, email is seemingly here to stay.

Things have arguably become more efficient thanks to email, particularly in financial services, especially the mortgage process. Think about your company’s origination process. To start, borrowers typically receive an email confirmation, letting them know any number of details about their loan application. From there, the title agent will send an email containing details of the property and requesting any required information. Real estate agents will keep their clients informed by emailing status updates and details pertaining to next steps. And just like that, with the exchange of a few emails, possibly never having met with your borrower face-to-face, your origination process is underway. In general, efficiency gains from these changes have been significant and helpful. Companies everywhere are encouraged to go all-digital, to eliminate paper, to respond quickly using technology. Email is an integral part of this strategy today.

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There is sense in exercising caution, however. There are risks, sometimes big ones with our ubiquitous use of this technology. From identity theft, to business email compromise, to wire fraud, you should take a careful approach to email and so should your staff. You should have a plan for educating your staff and responding to attacks and phishing attempts. But with 91% of cyber-attacks starting with email, most importantly, perhaps, is finding an alternative to email. Sure, some companies use old, antiquated systems for communication and document exchange, but these have historically been clunky and less easy to use than email. What if there was a secure strategy in lieu of email, something that not only added peace of mind to the process, but also increased efficiency? Read on to learn more.

Understand The Risk

There is a more secure strategy than email yet before explaining exactly what that is, it’s important to truly understand the risk. Just weeks ago a story hit the news here in Mortgage Cadence’s hometown. It reads like a paperback thriller. You know the kind – the one where you can sense trouble and know that the ill-fated character shouldn’t open that door (or in this case, email). A couple went to buy a house. They were emailed instructions on where to wire their funds – only somewhere along the way, the process was compromised, allowing a hacker to impersonate a title company employee. Money was wired, and by the time the mistake was realized, it was too late. The couple lost their life savings, all because of the hazards of email and the growing presence of hackers looking to capitalize on wire fraud.

According to a 2016 article published by the National Association of Realtors (NAR), nearly one-third of Brokers at an industry event indicated that they, or someone they know, have clients that were victims of wire fraud. In fact, the FBI warns that across the globe, law enforcement officers have received complaints of wire fraud in every U.S. state and nearly 80 additional countries, totaling over $2.3 billion in losses. Clearly, this type of attack is not uncommon. Hackers are acting as trusted sources and robbing anybody that falls into their traps. But how?

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A single failure by any one participant in the mortgage process exposes everyone involved. Think of it this way: whenever one of the parties’ email account is compromised, any email address copied in is also now at-risk to targeted phishing or monitoring for transaction details. Not only is your customers’ funds, identity, and other financial information at risk, but so is your reputation, if you don’t exercise caution. Across the nation, financial institutions are facing law suits due to breaches in security leading to fraudulent wire requests. Picture the headlines now: “(Your Company) Faces Lawsuit for Wire Fraud.” This doesn’t reflect favorably on your institution, and certainly not for prospective homebuyers looking to borrow money from you. So, how are you going to keep their information safe?

Educate Your People

Email isn’t going away. Therefore, you can and should implement processes to identify potentially harmful messages. The National Association of Realtors, FBI, American Land Title Association (ALTA), and others have published tips for keeping financial transactions secure. For example, here is what ALTA recently published:

>>Call instead. Confirm all instructions by phone before transferring funds using the number from the title company’s website or a business card.

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>>Be aware. It’s uncommon for title companies to change wiring instructions and payment info.

>>Confirm everything. Ask your bank to confirm not just the account number, but also the name on the account before sending a wire.

>>Verify. Call the title company or real estate agent to validate that the funds were received. Detecting that you sent the money to the wrong account within 24 hours gives you the best chance of recovering your money.

>>Forward, don’t reply. When responding, hit forward instead of reply and then start typing in the person’s email address. Criminals often use email addresses that are very similar to their real counterparts.

Informing your customers is a crucial first step. By educating them on the dangers or wire fraud and letting them know what kinds of communications they can expect from you, borrowers may be more likely to identify strange or unfamiliar emails as fraud. To that point, it is equally as important to train your staff. Keep them up to date on the latest new stories relating to this type of scam and require trainings on how to identify and prevent a breach by criminals. Awareness is half the battle. In addition to education, a new solution is needed.

Find A New Method

What if there was a better, more secure approach? A better, more secure solution is an online portal where all parties to the mortgage transaction collaborate at the same time inside a live mortgage folder. Cyber criminals cannot hack what they cannot see. Email is highly visible. The Mortgage Cadence Collaboration Center is not. Through this private network, critical customer information isn’t exposed to the outside world, thereby enhancing security. This eliminates the potential for human error as the weakest link in the transaction.

By using this new tool, which is one that routes all communications within a private network with no exposure to public servers, and one that automatically recognizes and organizes information through a predefined process, security can be significantly improved. With built-in messaging and real-time chat, this tools enables everyone involved in a transaction (borrowers, loan officers, title agents, real estate agents, other staff) to communicate in a single place, increasing efficiency and reducing cybercrime. With conversations time and date-stamped, everything remains logged and accessible – providing the ability to track and record securely. There are three main reasons this closed system enhances security:

1.) A criminal can’t hack what they cannot see. Behind the virtual walls of a closed system, communications remain secure and effectively invisible to hackers.

2.) Even if they were to somehow know about a transaction in process, the communication of the details are going on behind the wall making it significantly more difficult to compromise software than it is to gain access to an email account.

3.) And finally, by enabling all parties in the process to work together within the closed system, there is no reason for information to ever leave the software. In addition to efficiency gains from all participants having access to the information in a closed space, the whole process becomes more secure.

A closed network can help keep your customers’ money and identity safe, ensuring their trust in you, and keeping your reputation intact. Mortgage Cadence’s newly acquired Collaboration Center manages communications between borrowers, co-borrowers, real estate agents, sellers, attorneys, title agents, and all other parties on mortgage transactions, keeping all confidential data secure.

Conclusion

It is clear: all of us that participate in the mortgage industry face huge challenges when it comes to the potential for wire fraud. This is made far more likely through email. There are solutions available to address the risk for transactions within in the real estate industry, and the entire industry needs to be proactive and work together. By understanding the perils, providing constant education, and relying on closed systems for communication, risks can be reduced, keeping your customers’ data safer.

About The Author

Todd Hougaard

Todd Hougaard is Collaboration Center Product Manager for Mortgage Cadence, an Accenture Company. In this role, Todd is responsible for the strategic direction of Collaboration Center, which is designed to provide true multi-party collaboration for secure communication, document exchange, data transfer, and automation from origination through post-closing. Prior to joining the Mortgage Cadence team, Todd Hougaard spent the last two decades holding leadership positions within the mortgage technology arena, including as founder of BeesPath Inc. and Ingeo Systems and in sales operations at First American. He is an active member of the American Land Title Association, serves on the Technology Committee, and is currently an at-large member of the ALTA Title Action Network. Todd holds a B.S. in Geography from Utah State University.

TRID 2.0: Now What?

Over a year in the making, TRID 2.0 was finally released on July 7, 2017. With an effective date 60 days after the final rule is published in the Federal Register, and a mandatory compliance deadline of October 1, 2018, the industry is sure to have a lot to say about these new regulations.

TRID 2.0 is meant to provide additional clarity to the original TRID rule that went into effect on October 3, 2015. Changes include:

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Cooperative Housing. Loans on cooperative housing are now covered by TRID, having previously been left to state law definitions of real and personal property.

Tolerances. New tolerances have been added and others have been clarified, including total of payments, the “no tolerance” category and good faith, and property taxes.

Rate Locks. A new Loan Estimate, or Closing Disclosure, must be provided upon rate lock, even if nothing has otherwise changed.

Featured Sponsors:

 
Escrow. The Closing Disclosure Escrow Account Disclosures have been clarified, allowing for 12 months in “Year 1” calculations.

Additional Guidance. The amendment provides additional guidance around disclosure of construction to permanent loans, simultaneous second loans, disclosure of principle reductions, and a reiteration that re-disclosure of the Loan Estimate (LE) or Closing Disclosure (CD) is permitted at any time.

What’s Missing?

The CFPB has not yet finalized proposed changes to resolve the infamous “black hole” issue; instead, they published a new proposal. In case you’re unfamiliar, complications arise due to potential timing conflicts between the Loan Estimate and the Closing Disclosure. If a borrower experiences a change in circumstance after they have received the Closing Disclosure and needs to delay the date of closing, there are concerns that a lender will be unable to comply with both the requirements to provide a revised disclosure to the consumer within 3 business days of the change and simultaneously within 4 business days of consummation in order to reset the tolerance thresholds for the good faith determination. There is even uncertainty of the ability of a re-disclosed Closing Disclosure to reset tolerances at all. Can we expect a final TRID 3.0 to resolve the issue? Only time will tell.

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Similarly, the issue of disclosure of simultaneous title quotes for owner’s and lender’s title premiums remains unchanged and unaddressed. The current, and very complicated, method of calculating lender’s title in the case of a simultaneous quote still stands and is not currently included in the “black hole” proposal.

What Happens Next?

Our main concern after dissecting TRID 2.0 is the phased implementation. On the surface this sounds like a great thing for lenders, but what happens when a consumer compares disclosures between lenders? This gets tricky when it comes to the application date. Additionally, you don’t want to change to the new calculations in the Calculating Cash to Close table mid-loan cycle with your consumers. This would result in re-disclosed Loan Estimates, or the Loan Estimate and Closing Disclosure on a single loan may utilizing different logic. This could confuse consumers as well as investors on loan purchase, and examiners down the line.

Regardless of the outcomes our industry will adjust. One thing is for sure, policies, procedures, and technology will continue to play an essential role in mortgage compliance.

About The Author

Amanda Phillips

Amanda Phillips is EVP Legal and Regulatory Compliance for Mortgage Cadence, an Accenture Company. She works closely with Mortgage Cadence Product and Development teams to help interpret compliance requirements and assist in developing risk mitigation strategies and implementing the requisite controls within the Mortgage Cadence platforms. She also communicates with clients regarding Mortgage Cadence compliance interpretations and controls. Phillips joined Mortgage Cadence in January 2014 as its Legal and Compliance Lead, guiding development of the organization’s technologies, including the Enterprise Lending Center, the Loan Fulfillment Center and the Document Center.

Explaining The Mortgage Process Of The Future

As executives discussed the state of mortgage lending at the Seventh Annual ENGAGE Event in Denver, Colo., a lot of hot-button topics came up. For example, the discussion around what the future lending process will look like was very insightful. Here’s what was said:

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“Looking back at my immediate family, my grandparents couldn’t afford to own a home. My parents were the first to buy a home and they worried about how they were going to pay their mortgage, but owning a house meant that they had arrived and could secure a future for their family,” shared Molly Dowdy, Co-Founder of NEXT, the mortgage technology conference for women. Molly has nearly 20 years experience marketing in the mortgage technology space. She is also a member of the PROGRESS in Lending Executive Team.

“My parents still live in that home today. My point in sharing this story is to say that we have the power to create a more inclusive and transparent mortgage process.”

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And most believe that begins at the point-of-sale. “We have to elevate the customer’s experience,” said Pamela Stahl, the Product Manager for VirPack, a leading provider of document management and delivery technology for the mortgage banking and financial services industries. Leveraging 6 years of mortgage lending secondary market management experience, she joined the mortgage technology industry in 2011 as a product manager for a leading Loan Operation System before joining VirPack in late 2016. With almost 12 years combined mortgage and mortgage technology experience, she has a proven history of producing and delivering innovative mortgage lending SaaS technologies.

“We as an industry have done a lot in recent years to embrace mobile technology. We’ve launched mobile apps and we send the consumer mobile alerts, but we don’t use this technology to really explain the process,” Stahl continued. “Improving the customer experience is not just about pushing out automated messages in real time, it’s about helping the consumer truly understand what’s going on at all times.”

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Everyone agrees that the borrower has to be more informed at the frontend, but what happens after that? “We’ve focused a lot on the beginning of the process and how we can make that better for the borrower, but we have forgotten about the backend of the process,” explained Matt Hydrew, SVP, Enterprise Solutions at Mortgage Cadence, an Accenture Company. Matt specializes in the execution of enterprise software solutions with Mortgage Cadence, which focuses on end-to-end, SaaS based residential lending technology in the United States market. Mortgage Cadence solutions manage the workflow process, imaging, document prep, secondary marketing and other important components to a true end to end digital mortgage platform.

“If lenders are not efficient and communicative of everything that goes on in the backend of the process, all that communication and explanation on the frontend amounts to just window dressing,” Hydrew notes. “We have to use technology to genuinely improve the whole mortgage process an fully communicate that to the borrow up to and including the closing of the loan.”

Why is this important? Data shows that 34% of the buying power rests with millennials and they want a better mortgage proces. “We have a lot of very slick applications in this industry, but without borrowers to feed into them we have no business,” explained Brandon Perry, President at TTP Enterprises. Brandon oversees all operational and administrative activities of TTP. Brandon brings over 16 years of experience in various financial services industries to TTP, which enhances the company’s ability to maintain it’s position as industry leader in providing customers with an advanced marketing solution.

“The mortgage process of the future has to reach people of all ages and backgrounds in a more meaningful way so buying a home doesn’t remain just a very long, complicated and stressful thing to go through,” concluded Perry.

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.