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Th e M Rep o RT | 19 2015 tila/respa update Th e M Rep o RT | 19 S ince the Consumer Fi- nance Protection Bureau (CFPB) first opened it up to comments, the buzz in the mortgage industry has focused on the new regulations concern- ing TILA-RESPA disclosures. With so much buildup, it's hard to believe that the August 1, 2015 deadline is just around the corner. As creditors prepare for this tran- sition, it is readily apparent that these changes will require compa- nies to either upgrade or establish new technology mechanisms in order to keep pace. Addressing Disclosure Revisions T here are many ways that creditors can begin planning for the implementation of the new disclosure rules and related testing without yet using the new disclosures. For example, credi- tors can establish processes and procedures that comply with the requirements to send the disclo- sure documents three days in advance of closings. In addition, creditors can change the names of all fees related to the transaction into standardized names—includ- ing things such as appraisal costs, tax service fees, credit report costs, document preparation fees, and origination and underwriting fees. Notwithstanding these prepara- tions, the key element in allow- ing a seamless transition is most likely going to require industry players to modify their current technology systems so that they can remain competitive and in compliance. Lenders need to start evaluating their technology budgets and assessing the soft- ware and hardware used by their companies, as well as the existing integration between their technol- ogy platforms and those of their third-party service providers. Companies in the mortgage industry may question why there is a need for updated and new technology simply due to a few changes in disclosures. The most critical need is to allow for real time communication and informa- tion sharing between lenders and settlement agents and to provide for a more integrated mortgage lifecycle. Under the existing law, settlement agents must provide the HUD-1 under RESPA, while lenders must provide the TIL dis- closure. The new regulations will now require the lender to deliver the Closing Disclosure, which is the combined HUD-1 and final TIL disclosure. This will require the lender to draft the Closing Disclosure, while the settlement agent can still prepare the settle- ment statement. Lenders that work with settlement agents to produce the Closing Disclosure must share information with the settlement agent, and lenders may need to put staffing procedures and system changes in place in order to have an effective method of delivering an accurate disclosure. Additional Tech Tools T echnology needs in the indus- try are not limited in scope to those addressing the requirements of the disclosure modifications. There are additional technology needs such as the development of mortgage applications, integrating mobile devices, cloud storage, and managing big data. As Forbes contributor Ed Dumbill wrote back in May, Big Data is a term used to describe data that exceeds the processing capacity of conventional database systems. The data is too big, moves too fast, or doesn't fit the strictures of your database architectures." Technology is allowing lenders to provide for more accurate capture and analysis of Big Data and according to ARMCO's report titled Top Three Quality Control Trends You Need to Know for 2015, "leveraging 'big data' to your advantage through tracking, trending, benchmarking, and action planning is a strat- egy for success in a challenging environment." Big Data technology addresses the need for transpar- ency, identifying gaps and reduc- ing errors in record keeping. The ability to sort through Big Data can allow mortgage lenders and their vendors to improve their pro- cesses, prevent non-compliance and related penalties, and also increase competitiveness in the marketplace. When comparing technol- ogy solutions, creditors and their vendors will want to consider the impact technology will make and whether the solution will simply require upgrades to their systems or a complete overhaul. Companies will want to consider the flexibility of platforms and ability to use them on a variety of devices. Most importantly, indus- try players will have to determine whether they want to invest in platforms that can address other technology needs aside from just the new disclosure requirements. Products in the Marketplace T he TILA-RESPA disclosure requirements have given rise to a number of new and innova- tive technology options. The use of these services should collectively al- low for compliance, quality, and ef- ficiency in the mortgage lifecycle. A sampling of such products include: • Systems that automate work- flow process management, communication management, transaction management, docu- ment hosting, and provide for integrated mobile solutions. • Web-based mortgage quality control platforms that complete loan audit needs through an automated compliance and evaluation system. Keeping Up With the Times and the Regulators How Innovative Tech Solutions Can Simplify Compliance to TILA-RESPA Disclosure Changes By Debbie Hoffman and Eric Rawlings

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