6165 Greenwich Dr., Ste. 300
TILA-RESPA changes, including the new Closing Disclosure form, will be implemented on Aug. 1, 2015. Carving the path to that implementation date is going to be a challenge for lenders throughout the industry, as all of the old norms are changing. While the rates themselves are unchanged, the way that the disclosure is created will be different. The forms have been redesigned by the CFPB to be more consumer-friendly, and the implications for creating those forms electronically and mapping the data appropriately are significant.
Most importantly, the onus for creating accurate closing disclosures falls 100% on the lender, with substantial penalties for mismanagement. That is changing the way lenders are electing to interact with their provider networks, and there is a lot of work they must do to implement and manage that change.
The new rules will undoubtedly have an impact in vendor selection, lender’s migration away from ABAs, their concern for fee standardization, and their general tolerance for complexity. The lenders who have taken the time to contemplate these changes are realizing if they don’t move soon, they are never going to get there. And that is a big problem.
Meeting the challenge
ClosingCorp provides a national managed network of service provider rates and fees and has built its disclosure solutions and web tools to accommodate the regulatory changes. The company was the first to market with an industry-supported web portal and has grown its network into almost 20,000 unique service providers.
“ClosingCorp is seeing a sizeable surge in interest as lenders begin to contemplate the practical burden of meeting the time and accuracy demands around the new closing disclosure rules, and their increased liability and exposure if they fail to meet those standards,” said Brian Benson, CEO.
ClosingCorp maintains a comprehensive database of up-to-date closing costs, including recording fees and transfer taxes, for all residential properties in America. The company’s innovative geocoding technology results in higher hit and accuracy rates, and it offers a guarantee on its data, eliminating violation fees.
“We are obsessively committed to ensuring that our customers are satisfied,” Kamel Boulos, CTO, said. “The company continually seeks customer feedback and adapts its product suite according to that feedback. For example, SmartGFE, SmartGFE Calculator, and Seller Net Sheet were each created, and enhanced, based on the changing business needs of our customers..”
ClosingCorp’s in-house data and development teams allow the company to quickly address regulatory changes, customer requests, data changes and any technical issues that arise, saving valuable time in the process.
For 2015, the company is launching a holistic solution that will help lenders stay compliant — from loan estimate to closing disclosure.
“Once a lender generates a loan estimate using actual fees, we allow them to order those services in just a click,” Benson said. “We then follow that order all the way through to closing, and provide a complete audit of the activities associated with that path.”
This holistic approach provides a closing with fewer variances, because the services ordered and the services quoted will be identical; a tremendous pickup in productivity, as activities stay within the same ecosystem; and an accurate, efficient way to benchmark production and offer additional insight on the quality of services delivered by third-party providers.
ClosingCorp will also be embarking on its C2E (ClosingCorp Education) initiative for consumers.
The company’s future is tied directly to the “ecosystem” it is building to measure and track activities relevant to compliant closing. This ecosystem of closely interconnected players relies on each individual part to close and fund a loan successfully.
“Over the next few years, you will see ClosingCorp driving to bring transparency, efficiency,compliance, and connectivity to that eco-system from pre-qualification to application, underwriting, post-closing, closing and funding, while also offering a means to connect with increasingly educated and knowledgeable borrowers,” Benson said. “The feedback has been that this is precisely what the industry wants and needs, and we are very passionate and motivated to be on this exciting journey.”