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By far, the single-biggest challenge in mortgage lending in 2015 will be compliance with the 1,888-page RESPA-TILA Integrated Mortgage Disclosures Rule.
RESPA-TILA will impact everything lenders do, which means lenders must adopt brand-new workflows and processes in addition to educating staff and reexamining the relationships they have with service providers and business partners. Even though the entire industry saw this coming, many lenders are still not prepared.
The other challenge — which is closely related to compliance — is the cost of doing business. The intensifying focus on loan quality, in addition to preparing for new CFPB regulations and GSE loan auditing requirements, has pushed per-loan costs to an all-time high. Yet the vast majority of lenders have still not fully embraced automation, despite the fact that technology has been proven to reduce costs and improve efficiency.
Responding to the challenge
To an extent, every product and service Ellie Mae provides today was created in response to one or more industry challenges and to help lenders improve compliance, loan quality and efficiency.
An all-in-one mortgage management solution, Encompass automates more steps in the mortgage transaction than any other technology or provider. It handles loan production from the marketing stage to loan origination, processing, underwriting, closing and funding, and post closing and shipping.
With Encompass, lenders can also order credit and borrower verifications, order mortgage and flood insurance, access loan product and pricing, lock rates, check loan files for compliance against federal and state regulations and agency or investor guidelines, review loan files for quality, sign and store digital documents, and submit files to the secondary market, all without touching a single piece of paper.
“Encompass helps lenders minimize origination costs; maximize retail, wholesale, correspondent lending performance; and achieve compliance, loan quality and efficiency,” said Jonathan Corr, president and chief operating officer of Ellie Mae.
The solution is used by more than 104,000 mortgage professionals and hundreds of mortgage companies, including six of the top-20 mortgage lenders.
The Ellie Mae Total Quality Loan program is a best practice workflow for originating all residential mortgage loans. TQL is built into Encompass and helps lenders uncover and cure compliance, fraud and borrower income issues early in the origination process for every loan.
With TQL, lenders can eliminate manual data re-entry and reduce loan suspensions and buyback risk when selling loans to investors, which lowers costs.
The company addresses complex compliance needs with its Encompass Compliance Service, powered by Mavent, which manages the complexity of adherence to hundreds of regulatory rules.
And the recent addition of AllRegs to Ellie Mae’s offerings provides clients access to underwriting and loan product guidelines for Fannie Mae, Freddie Mac, Wells Fargo Home Mortgage, Citigroup, JPMorgan Chase and other large investors.
“Our acquisition of AllRegs places Ellie Mae in a separate league,” Corr said. “We are integrating its solutions into ours, including the huge AllRegs online reference library. That’s part of Ellie Mae now, solidifying our ability to handle all of a lender’s technology and compliance needs.”
AllRegs is used by virtually all of the top-100 lenders, as well as throughout numerous governmental agencies. Besides being the exclusive electronic publisher of the Fannie Mae and Freddie Mac guidelines, AllRegs provides education and training and publishes an online reference library of investor underwriting and insuring guidelines.
It also provides lenders with more than 370 federal and state statutes and regulations, and “how to” guides, including plain-language interpretations and analysis of regulations and guidelines.
In the coming year, Ellie Mae will continue to develop cloud-based mortgage technology solutions that further automate and simplify the mortgage process, helping lenders achieve compliance, quality and efficiency.
“Our ultimate goal is to automate the entire mortgage process,” Corr said.