<img src="http://www.mon-com-net.com/58465.png" style="display:none;">

Mortgage Software Solutions Blog

How RESPA And Other Disclosures Can Affect Your Mortgage Business

 

How RESPA And Other Disclosures Can Affect Your Mortgage Business 

More than four decades ago in 1974, the U.S. Congress passed the Real Estate Settlement Procedures Act (RESPA). This law required mortgage companies to disclose certain information at various points throughout the real estate settlement process. The purpose for this was to provide buyers with a greater comprehension of the financial impacts of their home buying decisions. It was intended to help improve their decisions by making them more informed consumers.

How does RESPA, GFE, & HUD-1 disclosures affect your mortgage business? To understand this it’s important to know what happens and what is required of lenders at different points throughout the mortgage lending process.

Beginning of Loan Application

When a borrower applies for a loan, the lender must provide the following items:

  • Special Information Booklet, consists of consumer information describing types of services involved in a real estate settlement
  • Good Faith Estimate (GFE), which shows an estimate of the various charges the borrower can expect to pay at settlement and, if the lender requires a specific settlement provider, he or she must disclose it on the GFE. The GFE is a prescribed, standardized form (updated in 2009) that the lender is required to use to provide this financial information so the buyer can make informed decisions.
  • Mortgage Servicing Disclosure Statement, which informs the borrower whether or not the lender intends to service the account or pass it on to another servicing company.

If the lenders do not give the above information at the time the borrower applies for the loan, they must do so within three days of receiving the loan application.

Before the Closing

RESPA requires lenders to disclose all Affiliated Business Arrangements (ABA’s) to the borrower before the transaction settlement date. An ABA means that the lender involved in the real estate transaction has done the following:

  • is in a position to refer the borrower to a service provider
  • has an ownership interest in a particular service provider
  • refers or influences the borrower, to choose that particular service provider

In the above situation, the referring individuals must disclose the ABA to the borrower at the time that they make the referral. Additionally, unless the referral is to someone who will solely represent the interests of the borrower (an attorney, credit reporting agency, or real estate appraiser), the referring person cannot require the borrower to use the referred services.

During the Closing

RESPA requires lenders to provide an initial Escrow Statement that lays out an estimate of the taxes, insurance premiums, and other charges that the borrower can expect to come out of his escrow account during the loan's first 12-month period. The Escrow Statement discloses the amount of the escrow payment and any reserve. In addition to the initial Escrow Statement, the lender must provide an Annual Escrow Statement to the borrower one time each year.

The lender must also provide the HUD-1 Settlement Statement, describing all the real estate settlement charges that apply to both the borrowers and sellers, including any apportionment of costs between both parties. Updated in 2010, HUD-1 is a prescribed, standardized form that HUD requires the lender to use to provide the settlement information.

After the Closing

RESPA requires that a loan servicing company send a Servicing Transfer Statement (STS) to the borrower if the loan servicing company transfers the borrower's loan to another loan servicing company. The borrower must receive the notice 15 days before the transfer effective date. The notice must identify the new loan servicing company, the address, contact information, and the date that the new company will begin to receive payments.

Because of the complexity of sensitive information throughout a mortgage-lending process, your mortgage company can save time, reduce stress, and eliminate costly processing errors with MortgageWorkSpace® from Access Business Technologies. This is a cloud-based powerhouse of a platform that allows you to keep vital documents organized, readily available anywhere at all hours of the day, and ensures 100 percent buyer compliance with the most recent banking standards and the Safeguards Rule. It’s a virtual desktop with 24/7 technical support for your mortgage company’s time-sensitive needs. To learn more about how Access Business Technologies can help you move your mortgage business into the cloud, contact us today.

Topics: Cloud Mortgage Servicing Access Business Technologies ABT's Hosted Mortgage Servicing

ABT provides Habitat for Humanity Pinellas County's, Mortgage Servicing Solution

Organization:Habitat_for_Humanity_of_Pinellas_County

 

Habitat for Humanity of Pinellas County, Florida (HHPC)

  • Using ABT’s unique hosting and managed services for D+H Servicing Director for over 2 years
  • Implemented Calyx PointCentral in the past quarter, for their loan originations.      
  • Both systems are hosted, managed and integrated by ABT
  • ABT provides access anywhere at any time on any computer system (PC and Mac) as well as tablets.

Catalyst for Change:

  • HHPC recognized that regulatory changes meant their then current way of managing mortgage loans would not be compliant.

April 12 2012, HHPC chose Access Business Technologies to help them with their mortgage processes. Note: Their servicing system hosted by ABT was up and running within 90 days.

ABT spent a great deal of time with HHPC, discussing their critical requirements and work flow. We wanted to make sure the servicng solution would fit their current and future needs.

Hurdles faced by HHPC using their previous system:

  • Did not easily allow them to generate yearly escrow analysis statements
  • Did not provide the ability to analyze their portfolio with the detail they required
  • Did not provide an investor report
  • Did not provide the ability to track Homeowner Association Fees (HLA’s)
  • Did not provide the ability to track 2nd Loans
  • Did not provide the ability to track Pronto Agreements
  • Difficult to track late fee transactions and successfully collect them when due

These processes were difficult to apply solid repeatable work-flows and tracking.

While HHPC did their best, the result were inefficiencies in processes, lost monies, and possible compliance issues. “We were very concerned about increasing regulatory changes and that we may fall out of compliance”, stated Jacquie Copp, Mortgage Operations Manager for HHPC.

ABT and HHPC – Working Toward a Solution:                           Working_together

The previous list of “Hurdles”, business processes and work-flows were listed out and our ABT Servicing Director® product specialist along with HHPC personnel, tackled each one.

The results of their efforts is an efficient workflow. Jacquie states, “With ABT’s expertise hosting D+H’s Servicing Director® software, we were able to add work flow to the standard features that are part of the software. We now have automation and accurate reporting capabilities that fit our needs.” Since ABT hosts and manages this platform, and securely deliveries access using cloud technologies. HHPC does not need to worry about updates, backups or falling out of compliance.

A Repeatable “Habitat for Humanity Template” is now available:

“We appreciate the opportunity to work with Habitat for Humanity of Pinellas County. They are a dedicated team working hard to better their community” states Chris Schwartz-Edmisten of ABT. “They now have a servicing solution that works very well, providing the compliance and efficiencies they were looking for”

This solution was designed for Habitat for Humanity’s unique requirements. It is a proven solution with over 2 years of “real world” Habitat for Humanity loan servicing work flow behind it. It is a repeatable mortgage servicing “template” that will work for any Habitat for Humanity servicing environment we spin up.

Each group who uses this system will utilize a proven process that follows the unique requirements that face all Habitat for Humanity offices. Each group will have their own instance that can be “private labeled” with their organizational name and logo etc.

HHPC requested a Loan Origination software in order to board loans – In this case Calyx PointCentral was the software that was put in place. PointCentral is also hosted and managed by ABT. Both components can “talk” to one another, ABT can also set up an interface (MortgageExchange™) that moves data from Calyx to the Servicing Director® platform.

Access to the cloud based Habitat for Humanity environment utilizes ABT’s MortgageWorkSpace™  . This web access portal means that users can securely access their environment from any computer (p.c. or Mac) or tablet/iPad. The connection can be made from anywhere (office, home, anywhere there is an internet connection).

ABT’s Habitat for Humanity Solution offers the following:

  • ABT will monitor the system making sure it is available and running at peak efficiency. We provide 99.9% environment up-times.
  • ABT manages your system and maintains the major and minor updates as they are released by the vendors
  • ABT automatically provides data back-ups.
  • ABT provides System Tech Support 24/7/365
  • ABT provides software expertise with a servicing product specialist that can answer your team’s questions
  • ABT’s data centers as well as ABT itself goes through a rigorous SSAE16 Type 2 certification. This certification is an independent audit which examines data protection and integrity

 

Habitat for Humanity of Pinellas County, as a locally run affiliate of Habitat for Humanity International, is part of a global, nonprofit housing organization operated on Christian principles* that seeks to put God’s love into action by building homes, communities and hope. Habitat for Humanity of Pinellas County is dedicated to eliminating substandard housing locally and worldwide through constructing, rehabilitating and preserving homes; by advocating for fair and just housing policies; and by providing training and access to resources to help families improve their shelter conditions.  Habitat for Humanity was founded on the conviction that every man, woman and child should have a simple, durable place to live in dignity and safety, and that decent shelter in decent communities should be a matter of conscience and action for all.

Partnering with our Community.  Habitat for Humanity of Pinellas County brings community volunteers, corporate donors, civic organizations and faith groups together to build affordable homes for struggling, low-income families and individuals throughout Pinellas County.

Access Business Technologies (ABT), has successfully hosted mortgage and supporting industry software from the leading mortgage software vendors for over 15 years.  Our clients include banks, credit unions, mortgage bankers, and brokers located nationwide.  These organizations confidently rely on ABT to provide a safe and secure managed environment for their critical client information. We are the mortgage technology and compliance experts.

 

Topics: ABT's Hosted Mortgage Servicing

Top 5 Questions We Are Asked About Hosted Mortgage Loan Servicing

For over 11 years ABT continues to work with Banks and Credit Unions who are looking for an easy to use, Mortgage Servicing software tool for use in their Mortgage Departments.  These organizations want a system that is hosted and provides a complete loan servicing solution.   We have been asked many questions over the years.  While each situation is unique, there are 5 questions that always come up.

Question 1:  If I host with you, is my data safe?  

Your Data is Safe

Answer:  A logical question.  After all you are handing the financial records of your customer/members, to another company.  If this data is compromised it could be disastrous.  As I have mentioned in other blogs, research the company you are considering.  A great way of doing this is to talk with their current clients who are hosting the same software you are considering.  How long have they been hosting that software? Are they compliant with banking regulations and can provide proper certifications?  Are they easy to work with?  Do they know the software and how available is their Tech Support Group?  Finding out the answers to these questions before the contracts are signed will help eliminate suprises later.

Question 2:  Will I still need my IT department?  

It SupportAnswer: You are not looking to replace your IT dept.  Rather you are trying to offload some of their work, allowing them to concentrate on the core banking systems.  It is important to work with a hosting company that understands the software and can work with your internal IT dept.  Your hosting company is an extension of your IT group.  The two groups should work together and complement each                                     other.

Question 3:  If an issue comes up who should be contacted? the software vendor - our IT department - or the hosting company?Person on phone

Answer:  It depends... But a consistent plan of action should be laid out for your team.   You do not want your people waisting time trying to figure who they should be calling.  It is logical that tech support calls should begin with the hosting company (they are acting as an extension of your internal IT group).  They should be able to identify the problem and bring in the approprate group(s) to create a solution to the issue.

Question 4:  If my software is hosted by another company how can I get the data back into my Core System(s)?

 Answer:  Integration into existing systems is very important.  You will need loan data flowing into your core system so your tellers can provide information to your customers.  Utilizing the core system should provide a way for your customers to have access to their loan data as well. Being hosted does not change the processes of feeding data from one system to another, it is servers "talking" to servers, software "talking" to software. Whether your software is running in-house or is being hosted by a hosting vendor, the integration should be similar.  Your options would be whether you would like the info "real-time" or an "end-of-day" feed.  An experienced hosting company has probably set up their servicing solution to run with a number of Core Systems.  If they do not currently run on a specific Core System, they should have the experience to still offer a helpful solution.

Question 5: What does it cost?

Dollar Sign

Answer:  It depends?  With ABT for example the cost of the software is covered in the hosting.  This saves a great deal of up front costs.  A hosted solution provides other savings as well because the hosting company is also paying for the hardware, the software to run the hardware environment, space in a "data center", personnel to run the data center environment, and qualified personnel who know the servicing platform and can provide your team technical support.  The cost is generally 25% to 45% less than if you were to run the system(s) yourself.

Remember if you were to host a system yourself, you need to consider adding IT staff to handle the software (note: you will want a person who understands mortgage software is a great help, since they will be called upon to run last minute reports, manage updates, and train support personnel).  When hosting the software internally you need to budget for purchasing and then updating hardware/software licenses as needed for your hosting environment, compliance with the stringent requirements of updates, back-up and Disaster Recovery, as well as fielding support calls from the Mortgage staff.

Summary:

Hosted services are gaining momentum, and whether you call it cloud computing, Hosted Services, or Virtual Mortgage Desktop it makes a lot of sense to partner with an experienced hosting team.

 ABT

 

Topics: Hosted Mortgage Servicing Harland Interlinq Servicing Director ABT's Hosted Mortgage Servicing Internet based mortgage loan servicing software