As federal regulation concerning mortgage document transparency grows, at least one company is reaping the benefits of lenders meeting compliance requirements already in place.
International Document Services had a record-breaking 2011, as the volume of initial disclosure document requests surged 80% from 2010 figures.
The Salt Lake City-based company experienced a 42% increase in new and existing clients using IDS for initial disclosures. Orders and requests grew 24% in 2011, compared to 15% growth during 2010. Five out of 20 document requests sent to IDS in 2011 were for initial disclosures, the company said.
“IDS has experienced tremendous growth in document package volume over the past few years, but 2011 was the first year that we saw a dramatic upsurge in a specific document area,” said Executive Vice President Mark Mackey.
Mackey attributed the spike to continuing lender frustrations regarding compliance.
"Simply put, lenders are struggling to bear this particular regulatory burden and turn to providers like IDS to lighten the load," he said.
That load is getting heavier thanks to the Consumer Financial Protection Bureau, which is proposing a five-page form and an alternative six-page disclosure document to function as the final mortgage disclosure form for consumers.
The new regulator is collecting opinions from members of the industry and the public on its prototype mortgage disclosure forms. The initiative is part of its "Know Before You Owe" mortgage project, which aims to better inform borrowers through greater transparency of mortgage documents.
In November, IDS rolled out a flood insurance disclosure form designed to notify borrowers that mortgage servicers who hold the loan in the future have a right to adjust the flood insurance coverage on their mortgages. The disclosure is required for all lenders who sell to Franklin American Mortgage Co., Mortgage Services III and Wells Fargo.
Lenders were overwhelmingly concerned about initial disclosure compliance, according to a recent survey of IDS customers.
“The compliance stakes for lenders have never been higher, and our instincts said initial disclosures were going to be a big concern in 2011,” Mackey said.