The daily business in mortgage lending involves tedious verifications. To make sure every time that the money goes to the right person or organization, you need to know borrower details like income, debt load, repayment history, financial habits, capacity to pay back, and the authenticity and value of collaterals offered. A broad range of information is collected, verified and managed through multiple agents.
Appraisers, asset managers, attorneys, brokers, escrow services, eviction firms, inspectors, insurers, and investors are only a part of the vendors list complementing mortgage services. Banks may have multiple contracts with a single vendor, or multiple vendors for each type of service. For example, you might investigate a property through two or more vendors/departments and each investigation for a separate purpose. The to-do’s can be cumbersome. In many cases, like while enlisting attorneys, you must even make sure that vendors are not on the Exclusionary Lists of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac.
Based on the Master Service Agreement (MSA) and Statement of Work (SoW), payments need to be made across. Vendor invoices should comply with agreed contract rates, and if they are to be reimbursed by the GSEs, the vendor should invoice the proper amount as stipulated by the GSE concerned. Compliance with the Consumer Financial Protection Bureau (CFPB) is even more important. CFPB closely watches all dealings of service providers with consumers. If there is any violation, the vendor and the lender will be held accountable. With so many parties to deal with individually, ensuring zero violation is no easy task.
Managing all the records is exhausting, let alone ensuring compliance and making error-free payments. But have you ever tried automated solutions like ‘Ernst Custom Fee Engines’, which take care of the small details in all those transactions? These custom fee engines are an integral part of any well-built modern mortgage software solution.
The fees and calculations these engines can handle include recording fees, taxes, deeds, mortgages, mortgage refinance tax credits, reverse mortgages, assignments, releases, indexing fees, buyer/seller splits, federal credit union exemptions, power of attorney, escrow fees, insurance premiums, settlement services, inspections services, property taxes, high risk indicators and some minor elements. Each one is treated differently at state and local levels.
Ernst Custom Fee Engines manage all third-party vendor fees that are required on loan estimate and closing disclosure. A mortgage technology solution like that facilitates easy, fast, accurate and CFPB-compliant solutions for all fees. These Fee Engines can be housed in Dynamic Link Libraries on the clients’ local servers. This gives clients the absolute freedom and control to manage their own unique sets of data and calculation algorithms within the fee engine. Through customized XML schemas, they can integrate all vendor fees with the loan estimate and closing disclosure with a few clicks, and within seconds. The program also allows lenders to easily migrate all settlement service fees and providers into their workflow with minimal effort.
In recent years, mortgage software solution providers have been integrating with ‘Ernst Custom Fee Engines’ to provide accurate third-party fee calculations based on the latest compliance guidelines. Modern technologies like the Web, XML, Mobile, and Custom Fee Engines ensure CFPB-compliance and RESPA-compliance. This helps drafting foolproof Good Faith Estimates (GFEs), so that there are no time-wasting verifications or rejections.
Preethi vagadia is a business architect worked in Mortgage and Finance software department with top notch companies and has over 8 years of experience in mortgage software solutions, ,mortgage management software etc. She has also worked in several process improvement projects involving multi-national teams for global customers in warranty management and mortgage.