How Are You Ensuring Compliance on Your Loans?
Written by: Bill Dolan, CMB, AMP
It goes without saying that lenders these days are looking at products that they haven’t used for several years (buydowns, loans w/ assumption clauses, 40-year term loans, ARMs, etc.) to accommodate new or prior homebuyers while increasing homeownership.
Creativity is one thing but compromising compliance is another. It is imperative that lenders in such an extremely and highly competitive market, not only maintain loan quality (whether for the secondary market or within your own portfolios) but remain vigilant with all these new regulations and guidelines coming at you almost daily it seems.
A case in point is the recent uptick of defects rising within the areas of underwriting and eligibility. What we at SCA are seeing are lenders expanding their credit box and getting more aggressive in attempting to qualify every potential borrower to get them into homes. SCA has also witnessed lenders originating some of these unfamiliar products in a rising rate environment.
Lenders need to be asking themselves the following:
Are the loans coming through your pipeline as spotless as they should be?
Are you avoiding errors like TRID miscalculations for each of these product types?
For example, when attempting to avoid originating a High-Cost loan, you as the lender need to test the rate-spread to ensure that the APR doesn’t exceed the benchmark rate by a certain amount and that the total points and fees don’t exceed a certain percentage of the total loan amount.
At SCA, keeping up with GSE and regulatory requirements as well as all federal and state regulations for our clients is a full-time business - just ask our teams of Compliance and QC analytics experts who perform both Pre-Funding and Post-Closing audits at such a detailed level.
SCA’s 32 years of experience in the consulting and services business has had one compelling theme run through our company – protecting and supporting our clients by lowering potential risk and exposure in accordance with our lender’s own thresholds and business practices. You can rest assure that SCA will keep abreast of all new regulations and guidelines established so you are not caught off guard and that the technology utilized by SCA in performing our QC audits will continue to ensure greater efficiency, improved accuracy, and better reporting that will ultimately improve your confidence when sharing results with Senior Management, your Boards, Auditors, Regulators, and Investors.
To learn more about reducing your QC expenses and outsourcing your Quality Control pre-funding and post-closing functions, contact Bill Dolan, Director at (617) 694-2617 or email me at: www.Wdolan@scapartnering.com. View our website at www.scapartnering.com to learn more about SCA’s consulting and business services in the areas of Technology, Compliance, Servicing, Training and Staffing.
