The Psychology Behind the Recovery

TheMReport — News and strategies for the evolving mortgage marketplace.

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12 | Th e M Rep o RT M // While many note possible pitfalls with more stringent compliance regulations, what are some possible positive outcomes from the new compliance laws? cheek // I am excited about Integrated Mortgage Disclosures. There has been quite a dis- connect between RESPA and TILA requirements in recent years, making it difficult to comply with the requirements of both acts at the same time. Combining these requirements should provide consistent guidelines between RESPA's Regulation X and TILA's Regulation Z and provide a consistent background for all of the state laws and regula- tions that point to the federal requirements. This consistency will eventually allow savings by removing disparate calculations and disclosures, fewer disclo- sures, and provide more useful information to the end consum- er. I have high hopes. Although there have been some new "pain points" as- sociated with Ability-to-Repay and Qualified Mortgage (QM) requirements, the goal is to originate quality loans consum- ers have the ability to repay. M // What challenges have you and your team faced in making sure Ellie Mae's compliance products are current and correct? cheek // The biggest challenge is the length of time between issuance of a final rule and the effective compliance date for that rule. When a government agency or an investor publishes what it may consider a minor or easy change, it is not a small change, especially if it must be incorporated into software. Each new requirement may involve a new data field, a new set of calculations, a new disclosure date captured, or new disclo- sures. With software release schedules and roadmaps, it is al- ways a juggling act to implement last-minute compliance changes. Each change goes through a rig- orous process of review, analysis, requirements, design, develop- ment, and QA. Another challenge is lack of clarity in certain laws and regulations. When it comes to automated compliance soft- ware, it can be difficult, if not impossible, to automate a law or regulation if the guidelines are not clearly described. Words and the context in which they are written matter, especially when they will be interpreted into software. Words like "reasonable" or "bona fide" with- out specific definitions can be difficult to consistently imple- ment in software. In automated compliance testing, the answer must be "yes" or "no." There is no "maybe" in software. M // Ellie Mae's goal is to "automate the entire mortgage process." How close do you think Ellie Mae is to completing that goal, and what hurdles are left to overcome? cheek // I believe Ellie Mae has made huge strides toward its goal. HUD's Mortgagee Letter 2-14-03, in which HUD an- nounced expansion of the use of electronic signatures on certain lender and servicer documents, creates new opportunities for Ellie Mae to achieve this goal. I believe the final hurdle will be the acceptance of the e-mortgage as a recordable instrument in every jurisdiction. M // What would your clients say are the best aspects of Ellie Mae's compliance products? cheek // I believe they value the accuracy, consistency, and configurability of Ellie Mae's compliance products. Ellie Mae strives to provide innovative and quality solutions to its customers. M // What advice or lessons have you received in your career that you wish you would have known sooner? cheek // Say "no" more of- ten. Question the "status quo." Ask "why" and "why not" more often. Conquering Compliance As Vp and counsel of product compliance at Mavent Inc., Angela Cheek knows better than practically anyone that remaining nimble in this post-QM era is important to business health. That's why she relies on her experience as head of the team that oversees Mavent's compliance products, ensuring compliance rules are current and correct. Cheek has extensive experience working with financial service providers on the implementation of automated compliance solutions, and she offers hope to those feeling overwhelmed by the compliance process. take 5 "In automated compliance testing, the answer must be 'yes' or 'no.' There is no 'maybe' in software."

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