Lending in the High Tech Age

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The Latest SERVICING H Fiserv now offering a suite of technology solutions aimed at keeping clients in compliance. the servicing process spectrum, audits transfer files for data mismatches and critical documents, and accumulates and archives notes, documents, and borrower communications. All of these processes are automated, Fiserv says, allowing institutions to avoid the costs of additional staff to meet the new regulatory requirements. "The lending environment has become increasingly complex, and lenders and loan servicers are trying to manage all of the new requirements that are not supported by traditional lending technologies," said Gregg Lehman, product manager of enterprise content management at Fiserv. "LoanComplete is the first comprehensive solution that complements existing lending systems and simplifies the regulatory compliance, loan origination, and servicing processes and helps lending institutions reduce risk, increase customer satisfaction, and enhance profitability." The M Report | 43 se c on da r y m a r k e t F iserv, Inc., a provider of technology solutions for the financial services industry, says lenders and servicers seeking help to maintain compliance with the Consumer Financial Protection Bureau's (CFPB) servicing rules should look no further than the company's LoanComplete suite of products. In a release, Fiserv specifically pointed to two of CFPB's final servicing rules: the Real Estate Settlement Procedures Act (Regulation X), which lays out requirements for communications regarding loss mitigation options, and the Truth in Lending Act (Regulation Z), which establishes guidelines for companies to respond to consumer requests for information regarding their loans. To help companies address these issues, LoanComplete automatically gathers documents for the required servicing file, tracks missing documents across ability to repay their mortgage debt." The proposed rule establishes two categories of QMs that have different protective features for consumers and different legal consequences for lenders. HUD's proposed qualified mortgage categories are determined by the relation of the annual percentage rate (APR) of the loan to the average prime offer rate (APOR). According to HUD's statement, the two categories of QMs will be that "a rebuttable presumption qualified mortgage will have an APR greater than APOR + 115 basis points (bps) + ongoing mortgage insurance premium (MIP). Legally, lenders that offer these loans are presumed to have determined that the borrower met the ability-torepay standard. Consumers can challenge that presumption by proving that they did not, in fact, have sufficient income to pay the mortgage and their other living expenses" and that "safe harbor qualified mortgages will be loans with APRs equal to or less than APOR + 115bps + ongoing MIP. Lenders originating these mortgages have the greatest legal certainty that they are complying with the ability-torepay standard. Consumers can still legally challenge their lender if they believe the loan does not meet the definitions of a safe harbor qualified mortgage." HUD says the new rules serve to provide credit access to creditworthy but underserved borrowers. a na ly t ic s Erasing Compliance Concerns UD proposed a new definition of "qualified mortgage" (QM) in a recent statement. To meet the new QM requirements, a mortgage will have to require periodic payments, have terms not exceeding 30 years, limit upfront points and fees to no more than 3 percent with adjustments to facilitate smaller loans, and be insured or guaranteed by the Federal Housing Administration (FHA) or HUD. The Dodd-Frank Act required HUD to propose a QM definition aligned with the ability-to-repay criteria set out in the Truth-in-Lending Act (TILA) as well as the department's historic mission to promote affordable mortgage financing options for qualified lowerincome borrowers. "The new limit on upfront points and fees for all Title II FHA-insured single-family mortgages is consistent with the private sector and conventional mortgages guaranteed by Fannie Mae and Freddie Mac to attain qualified mortgage status under CFPB's final rule," HUD said in a statement. "Currently, HUD does not insure, guarantee, or administer mortgages with risky features such as loans with excessively long terms (greater than 30 years), interestonly payments, or negativeamortization payments where the principal amount increases. Moreover, HUD's existing underwriting standards require lenders to assess a borrower's s e r v ic i ng Agency offers its take on what makes a qualified mortgage. Or ig i nat ion HUD Releases Proposed QM Definition

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