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TILA-RESPA technology cheat sheet

What you need to know when investing in a digital closing solution

This article is part of HW PartnerDirect™. What is this?

In Tuesday’s post, we discussed an ROI model based on some metrics we gathered from the industry that clearly detailed how one could save over $1,100 on the cost of a closing.

Be honest – how many of you thought “too good to be true” at even the first glance of the headline?

If you haven’t yet, download the ROI model spreadsheet file and see for yourself how much a digital closing could save your organization. All of the metrics have been broken out into their own tab in order to input your data easier. And if you have any questions, simply ask the team at TILARESPA.com and they’ll work with you to answer them.

Also in that post, I mentioned the TILA-RESPA Integrated Disclosure Rule having spurred some tech innovations. Some have been around for a while, while others are quickly adapting for compliance of the rule that goes live on Aug. 1, 2015. The CFPB’s eClosing pilot showcases a few solutions, but even that cross-section of the technology still doesn’t provide an apples-to-apples comparison of how technology solutions can address the rule.

To help cut through some of the clutter, let’s start with a high-level list of features that you’ll need to look for in a technology solution that will help you comply with the TILA-RESPA Integrated Disclosure Rule at a basic level:

·       Secure delivery (and proof of it) for the new loan estimate and closing disclosure forms. Not only will you need to deliver the disclosure forms to consumers in their respective three-day windows, but you’ll need to do so in a secure environment. On top that, you’ll need a way to prove delivery of the forms to consumers, and possibly even receipt of them.

·       Collaboration with your business partners. As if delivery of two new forms wasn’t enough to get used to, you’ll need to do it in three days and make sure that the fees you note on the loan estimate and closing disclosure don’t exceed the tolerances set forth in the rule.

·       Providing educational materials to help the consumer understand the closing process and documents. The biggest takeaway for the changes brought forth from the CFPB have to do with educating the consumer. Brochures and paper can get costly, so delivering digital content is the obvious way to go. Rich-media and interactive content goes a step further to provide an easier-to-digest format, and help with the following capability…

·       Determining what documents and educational material the consumer viewed/interacted with. If you fired off an email, handed the consumer a brochure, or even simply talked about something face-to-face, how will you record or determine if the consumer engaged that content? The digital delivery of educational content will be key to not only getting the consumer to interact with it, but tracking what the consumer actually accessed.

·       The ability to provide a complete log of all of the previously mentioned activities. Once the closing has happened, you’ll inevitably need a way to provide proof of how the closing was performed. In addition to enforcing complete closings, with as few errors as possible, look for solutions that can provide an audit trail of what actually happened during the closing, and where you interacted with the consumer throughout the process.

In addition to features, also consider a few other things when comparing technology solutions: 

·       Low impact to your organization. Ask how long the process is for implementation and training, and what the required organizational down-time is (if any). Also find out if the solution will require any upgrades to your IT environment such as servers or new laptops, tablets, etc.

·       Ability to leverage that technology investment for other business goals. Is the solution only going to help your organization with TILA-RESPA compliance, or can it provide value elsewhere in your business? Is there an opportunity to provide any upsells/cross-sells with the technology?

·       Multi-device capable. The explosion of digital in consumer markets has created an interesting (and costly) dilemma: consumer technology is now rapidly out-pacing the technology that businesses spend great time and money implementing. Ensure that the solution is accessible to consumers on a wide variety of devices, so you don’t take on the expensive overhead of constantly changing your technology to keep up with the consumer pace.

So there you go, a simplified “cheat sheet” to help you focus on how solutions can help your organization comply with the Integrated Disclosure rule.

Looking for a place to start?  Take a look at the participants in the CFPB’s eClosing pilot. See what they have to offer, get a demo. Only by actively seeking out some of these solutions will you be able to see for yourself that compliance with the rule isn’t as daunting as it first sounds.

All information and views expressed or implied are provided without warranty and are only opinion. Each participant should seek legal representation for legal interpretation of the ruling and the CFPB directly for final instruction and interpretation. The final rule can be found here.

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