Washington, DC (May 16, 2024) - Asurity Technologies, LLC (“Asurity®”), a leader in consumer lending compliance software and advisory services, announced today that mortgage technology veteran Brad Vasto has joined the company as Senior Vice President - Sales. Leveraging his 30+ years of experience in meeting the needs of the mortgage, banking, and financial services industries, Brad will be responsible for sales activities relating to Asurity’s industry leading Software-as-a-Service (SaaS) mortgage loan compliance products, including RegCheck® and Propel™.

Asurity’s RegCheck is a best-in-class SaaS solution that enables loan officers and compliance specialists expedite loan closings with greater confidence and accuracy. RegCheck features compliance testing across HOEPA, Federal HPML, Initial APR, TRID, as well as other state, federal, and investor requirements; a detailed calculation methodology to understand if a test has passed or failed, downloadable reports, and more. Propel provides lenders with an intuitive, flexible digital mortgage document generation platform featuring low- to no-code document creation, an easily configurable forms library containing a full collection of forms covering federal, state and local regulations and more.

"We are thrilled Brad has joined the Asurity team,” said Luke Wimer, Chief Operating Officer. “His proven track record of driving growth and fostering customer relationships will further accelerate the advance our business. As Asurity continues to expand its reach, Brad’s leadership will be instrumental in defining sales strategy and delivering exceptional value to our customers."

Prior to joining Asurity, Brad spent 19 years at Black Knight and its predecessor companies as Managing Director of Business Development. Brad also has held senior sales leadership roles at Washington Mutual, Homeside Lending, ALLTEL Information Services and Informative Research.

Brad added, “Asurity’s commitment to innovation and excellence across mortgage and financial services aligns with my own professional objectives. I am excited to join such an exceptional team with a record of innovation and market leadership. I look forward to working with some of the industry’s finest mortgage compliance professionals while leveraging my experience and expertise to drive revenue growth, to build strong customer relationships, and to deliver successful business outcomes.”

For more about Asurity’s mortgage loan compliance solutions, RegCheck and Propel, visit www.asurity.com or email us at info@asurity.com.

The 2024 A Guide to HMDA Reporting It Right! is now available on the FFIEC's website.  Click here to access the guide.  

The higher interest rate environment has given rise to a renewed interest in the use of temporary buydowns to help borrowers lower their initial monthly mortgage payments.  A temporary buydown allows a lender, seller, builder or other third party to deposit funds which will subsidize the borrower’s mortgage payments for a predetermined period of time, thereby reducing the borrower’s monthly payments during that agreed period.  Buydown funds can also be provided by borrowers themselves.

Temporary buydowns can be particularly attractive for first time homebuyers who will be making mortgage payments for the first time as well as borrowers who expect to have higher incomes in the future or who want to set aside money for other expenses while their monthly mortgage payments are lower.

Documenting the Buydown Terms

Typically, the terms of the buydown are not reflected in the note the borrower will execute as part of the mortgage transaction. Instead, due to Fannie Mae and standard investor requirements, the terms are set forth in a separate Buydown Agreement between the borrower and the party providing the buydown funds. Fannie Mae requires the note to reflect only the permanent payment terms rather than the terms of the buydown plan and requires the Buydown Agreement to provide that the borrower is not relieved of the obligation to make the full mortgage payments required by the terms of the note if, for any reason, the buydown funds are unavailable. 

If the lender funds the buydown, the Buydown Agreement must require that the funds in the buydown account be transferred to the new servicer if the mortgage servicing is subsequently transferred. 

It is important for borrowers to understand, particularly if they are contributing the buydown funds, that buydown funds are not refundable.  However, if the mortgage is paid off before all the funds have been applied, the agreement may include an option for the buydown funds to be returned to the borrowers or to the lender, if the lender funded the buydown.

Disclosing the Buydown – What are the Requirements

Whether the Loan Estimate and Closing Disclosure is required to reflect the terms of the buydown when disclosing information impacted by the buydown varies based on who is contributing the buydown funds and whether the buydown terms are included in the note.  The commentary in Reg. Z [12 CFR 1026.17(c)(1)] indicates that the Loan Estimate and Closing Disclosure must include the terms of the buydown agreement when either:

•   The borrower is contributing the buydown funds, regardless of whether the terms of the buydown are reflected in the credit contract (the note); or

•   A third party is contributing the buydown funds and the terms of the buydown are reflected in the credit contract.  As indicated above, Fannie Mae and most investors prohibit the note from including the terms of the buydown in the note so these types of buydowns are less common.

The commentary provides that the terms of the buydown must not reflect the terms of the buydown if a third party contributes the buydown funds and the credit contract does not reflect the terms of the buydown. 

Special Considerations When Determining Loan Qualification

Lenders must use the note rate, rather than the bought-down rate, when determining whether the borrower qualifies for the loan as the borrower is still ultimately responsible for the full payment amounts even during the initial buydown period.  In addition, if buydown funds are contributed by interested parties to the transaction, Fannie Mae’s interested-party contribution limits will apply and must be taken into account.

Due to the complicated and unique nature of buydowns, proper and complete documentation of all aspects of the transaction is essential.  The use of a document provider that possesses the requisite subject matter expertise and necessary loan documents should be a priority.

The Propel™ document platform has the capability to incorporate a temporary buydown into loan packages for all states.  If you have any questions regarding buydowns or any of Propel’s other capabilities, please contact Franci Webster at fwebster@asurity.com

By Diane Jenkins, CMB
Director, National Mortgage Regulatory Compliance, Propel;
Partner, Sandler Law Group

RiskExec has recently been updated to include the following enhancements:

Redlining Analysis Module

Analysis Results Gap Metric

Users can now benefit from enhanced Volume, Peer and Market results in the Redlining module, which now includes a Gap metric. This feature indicates the number of additional records needed in the reviewed tracts to match the peer or market percentage for that geography. 

Please Note: While the Gap metric provides valuable insights, it should not be regarded as the single source of truth. Instead, it serves as a helpful reference point for analysis purposes. Users are encouraged to consider additional factors, such as lender and peer performance trends, mortgage market conditions, and product offerings, and exercise critical judgment when interpreting and applying this new Redlining metric.

Filter Analysis Results

Users are now able to filter the analysis results to display only statistically significant results. Additionally, users can suppress rows that yield no results.

Create Respondent Group Peer Sets from Redlining Analysis Results

Users who have conducted a Streamlined or Advanced Redlining Analysis, and opted for RiskExec to create their peer groups, can now easily extract those Respondent Groups Peer Sets to the Peer Analysis module.

Peer Analysis Module

Peer Sets: Add a Comment

RiskExec users are now able to add a comment or description when creating a Peer Set in the Peer Analysis module.

RiskExec Maps

New Layers

Two new mapping Layers have been added to RiskExec Maps:

New Theme

One new mapping Theme has been added to RiskExec Maps:

Fair Lending Module

Marginal Effect in Logistic/Underwriting Regressions

A Marginal Effect is an advanced statistical measure defined as the partial derivative from a regression equation. It is the instantaneous slope of one of the factors when all the other factors are kept constant. It represents a particular factor's impact on the Regression model outcome. The higher the absolute value of the Marginal Effect, the “more important” that factor is in the regression equation.

Note: To utilize the Marginal Effects metric in analyses run before May 5th, the user must re-run those analyses. 

VIF for Logistic/Underwriting Regressions

A Variance Inflation Factor (VIF) is an advanced statistical measure that reflects the amount of multicollinearity in a regression analysis. A large value for the VIF indicates a factor has a highly collinear relationship with other factors, however, consideration of multicollinearity should be balanced by the requirement that fair lending models accurately reflect lender credit policies. Typically a high VIF on the indicator variable for membership in a prohibited basis group would be a significant concern in a fair lending regression model and a user may consider modifying the model to enhance performance. 

Note: To utilize the VIF in analyses run before May 5th, the user must re-run those analyses. 

Washington, D.C. (April 23, 2024) - Asurity Advisors, LLC, a leading provider of regulatory risk and compliance consulting services to the mortgage and financial services industries, announced today that seasoned regulator, advisor, and regulatory risk consultant, Vincent Coe has joined the organization as a Director. Leveraging his 15+ years in banking and financial services, Vince will assist clients in solving complex compliance challenges and tackling evolving industry priorities.

Vince most recently served as leader of a boutique advisory firm, assisting clients with matters spanning enterprise risk management, risk reporting, dashboarding and business planning, UDAAP, and Fair Lending. Vince understands the nuances of complex regulatory matters, having worked at the FDIC, the U.S. Department of Justice, the FTC, and the Federal Reserve in various examination and legal roles. In addition, working as a bank advisor and as a senior examination consultant, he has supported large organization’s management of complex data, analytics, legal defense, and remediation activities.

Vince is a graduate of the University of South Carolina and earned his law degree (J.D.) at Case Western Reserve University. He holds several professional certifications and designations including: Certified Regulatory Compliance Manager (CRCM), Certificate in Executive Management (Francis Marion University), Certificate for Building a Successful Diverse Business (Tuck School of Business at Dartmouth), and National Minority Supplier Development Council (NMSDC) Emerging Young Entrepreneurs (EYE) Program Graduate. 

“We are thrilled to have Vince as the newest member of our growing Asurity Advisors team,” said Grace Brasington, Senior Managing Director. “His analytic depth in compliance, Fair and Responsible Banking, risk management, and remediation, immediately broadens our range of capabilities and enhances our ability to provide world-class support to our valued clients.”

Asurity Advisors provides regulatory compliance services for financial institutions and mortgage lenders. The team of domain experts leverages its deep expertise to guide these enterprises  through the complexities of regulatory compliance. Asurity Advisors services include: CMS Reviews, Fair and Responsible Banking, CRA, Crossing the $10 Billion Threshold, Fintech Compliance, Enterprise Risk Management, and Operational Reviews/Process Improvement.

Vince stated, “Serving alongside the Asurity Advisors professionals is a fantastic opportunity to be at the forefront of shaping operational and compliance capabilities in the financial services sector. I look forward to working closely with my colleagues in assisting clients in mitigating their business risks and meeting the emerging challenges that they encounter on a daily basis.”

For more information on Asurity Advisors offerings, please visit www.asurityadvisors.com or email advisory@asurity.com.

The mortgage process can be daunting, with its myriad regulations and requirements. Among these, the TILA-RESPA Integrated Disclosure (TRID) Rule, implemented by the Consumer Financial Protection Bureau (CFPB) in 2015, stands out for its impact on disclosure timing requirements for mortgage lenders. Similar to the fee tolerance requirements discussed in Part 1 of this series, it is crucial for lenders to understand and adhere to the timing requirements under the TRID Rule to maintain compliance and provide borrowers with a transparent and smooth mortgage experience. In this blog post, we'll delve into the timing requirements of the TRID Rule, including delivery methods, business days, certain exceptions, as well as offer recommendations for lenders to streamline their workflows, thereby avoiding disclosure timing issues.

Overview

The goal of the TRID Rule was to simplify mortgage disclosures and enhance consumer understanding by consolidating the loan terms into more consumer-friendly formats. It integrated the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA), requiring lenders to provide borrowers with specific disclosures at various stages of the mortgage process. By receiving disclosures well in advance (Loan Estimate) and having a waiting period before closing (Closing Disclosure), the TRID Rule aimed to give borrowers more time to compare offers, ask questions, and make informed choices about their mortgage.

Timing Requirements

Central to TRID compliance are the timing requirements for three key disclosure types:

  1. Loan Estimate (LE): Lenders must provide borrowers with a Loan Estimate within three business days of receiving a mortgage application. This disclosure outlines the loan terms, estimated closing costs, and other pertinent information, empowering borrowers to compare loan offers effectively.
  2. Closing Disclosure (CD): The Closing Disclosure must be provided to borrowers at least three business days before closing. This document summarizes the final loan terms, closing costs, and details of the mortgage transaction. The three-day waiting period allows borrowers to review the terms and ensure they align with expectations before committing to the loan.
  3. Revised Loan Estimate or Closing Disclosure: If certain changes occur during the mortgage process, lenders may need to issue a revised Loan Estimate or Closing Disclosure. However, changes triggering a new waiting period vary in significance, with some requiring an additional three-day waiting period and others not.

Delivery Methods and the Mailbox Rule

Fortunately, the TRID Rule offers lenders some flexibility regarding how these disclosures are delivered. Here is how the timing requirements apply according to each method:

Business Days

To ensure compliance with the timing requirements under the TRID Rule, it is important to note that the Rule employs two distinct interpretations of “business day” to ensure clear timelines for disclosure delivery. Understanding and adhering to the appropriate “business day” definition are of paramount importance for accurate TRID compliance. The two definitions are as follows:

  1. Standard Definition (General): The standard “business day” definition is a day on which the creditor’s offices are open to the public for carrying out substantially all of its business functions.  This definition means the day count may vary from one lender to the next.  It also means the day count can change from year to year within a given lender as they expand or contract the observed holidays and other company events. 
  2. Specific Definition: The specific definition does not vary from one lender to the next. It includes all calendar days except Sundays and legal public holidays as specified under 5 U.S.C. 6103(a).  This list seldom changes, but it did so recently with the introduction of the Juneteenth holiday in 2021.

Exceptions 

The TRID Rule does allow for some of the timing requirements to be waived or modified by the borrower if they determine that they need the credit to meet a  bona fide personal financial emergency.  While the CFPB does not clearly define a list of conditions that must be met, they do require that the borrower provides a written statement detailing the set of circumstances that necessitated closing the loan prior to the waiting period. Instances such as going on vacation or attending out-of-town work meetings likely would not qualify as a bona fide personal emergency, but a waiver to avoid a foreclosure deadline would likely meet the criteria. 

Additional TRID Timing Requirements of Note:

Recommendations for Lenders

To ensure compliance with the timing requirements under the TRID Rule and mitigate disclosure timing issues, lenders can implement the following strategies:

Conclusion

The consequences of violating TRID's timing requirements can be significant. Inaccuracies or missed deadlines can lead to rescission rights for borrowers, allowing them to back out of the loan even after signing the final documents. Additionally, lenders may face penalties from regulatory agencies if they are not in compliance with the Rule.

By understanding the TRID Rule's timing requirements and implementing these steps, lenders can ensure a smoother and more compliant mortgage process for everyone involved. This approach not only protects lenders from potential violations, but also fosters trust and transparency with borrowers throughout the loan journey. By implementing streamlined workflows, leveraging technology, and prioritizing communication and education, lenders can minimize disclosure timing issues and provide borrowers with a seamless and compliant mortgage experience. 

For further guidance, consult the CFPB’s resources on the TRID Rule, including the TRID Rule FAQs

Did You Know?

RegCheck®, Asurity’s automated mortgage compliance solution, allows lenders to detect TRID timing issues in real time, saving lenders valuable time and money. Testing requirements in RegCheck are highly customizable, allowing lenders to quickly identify those issues that matter the most according to their business practices. If you have any questions regarding the TRID functionality in RegCheck, please contact Franci Webster at fwebster@asurity.com

Jonas Hoerler

Jonas Hoerler is Chief Regulatory Counsel for RegCheck at Asurity. Jonas has worked in mortgage regulatory compliance for nearly 20 years, acting as staff attorney and later as senior regulatory counsel prior to joining the RegCheck team. In his current role, Jonas manages the legal and compliance requirements of RegCheck and oversees all aspects regarding legislative review and product implementation. 

RiskExec has recently been updated to include the following enhancements:


Preliminary 2023 HMDA Peer Modified LARs Available in RiskExec

On March 25, 2024, the CFPB released the preliminary 2023 HMDA Peer Modified LARs. Our team has downloaded, converted, validated, and loaded the data into RiskExec for immediate use. This data may be updated once more before the 2023 HMDA Peer National Snapshot is released in June 2024.

The 2023 data has over 11.5 million records from over 5,000 Respondents, compared to 16 million records from 4,440 Respondents for 2022. For more information, see this Help Center article

Additionally, the state files are available for download in the Peer Analysis module under HMDA Peer Data.

Peer Analysis Module

HMDA Respondent Group Disparity Indices Report

This report has been updated to include Combined Race/Ethnicity as a report option.
 
HMDA and CRA Modules

Branch and ATM Distribution Report

This report has been updated to include MBCT, MBHCT, MHCT, and Distressed/ Underserved as Report Field options.
 

Assessment Area Module

Demographic Information For Geography Report

This report has been updated to include MBCT, MBHCT, MHCT, and Distressed/ Underserved as report Categories.

Fair Lending, Redlining, Fair Servicing, and Batch Geocoding Modules

Crosstab Report Record Drilldowns

The Crosstab Report has been updated to allow users to drill down into the records in this report. To do so, click on a hyperlinked number in the report to pull up the record list. 

CRA Module
RiskExec Full Data Export Format

This export format has been updated to include the CD Loan Description field.

Maps

Banking Markets Layer Update

The Banking Markets map layer has been updated to match some updated definitions of the Federal Reserve System. The data is provided by CASSIDI - Federal Reserve Bank of St. Louis, https://cassidi.stlouisfed.org.

Washington, D.C. (March 27, 2024) - RiskExec, Inc. (“RiskExec”) a subsidiary of Asurity Technologies®, LLC (“Asurity”), is pleased to announce the availability of the Preliminary Modified Loan Application Registers (LARs) for Home Mortgage Disclosure Act (HMDA) 2023 submission data. The Consumer Financial Protection Bureau (CFPB) has recently deposited this data in the public domain, and RiskExec has swiftly downloaded and verified the information.

RiskExec is a SaaS compliance and reporting platform designed for managing regulatory compliance for banks, mortgage lenders, credit unions, auto lenders, and digital lenders. The best-in-class solution quickly geocodes, runs edit checks, and with clean data, creates analyses to determine lending dispositions, compares to peers by market, and tracks performance towards achieving internally defined goals.

While awaiting the official release of the Respondent Panel necessary for converting this data into Depositories, Independent Mortgage Companies, and Credit Unions, RiskExec has leveraged its expertise and logic to provide users with immediate access to this critical market information.

"We understand the importance of timely access to comprehensive data for informed decision-making in the mortgage industry," said Anurag Agarwal, President, RiskExec. "With the Preliminary Modified LARs now available, RiskExec users can gain valuable insights into originations, lending trends, and top lenders' performance in 2023."

RiskExec is conducting in-depth reviews and three-year trending analyses to offer users a more detailed understanding of market dynamics and performance metrics. A snapshot of year-over-year changes reflects this:

RiskExec users can access this data today, offering them a competitive advantage in navigating regulatory compliance and optimizing lending strategies.

For more information or to schedule a demo, contact Chris Gray at riskexec@asurity.com or (202) 765-2150. 

Fannie Mae recently published Fair Servicing Best Practices (“FSBP”). Developed with input from more than 30 mortgage servicers and community advocacy groups, the FSBP is intended to ensure Fannie Mae servicers are aware of the expectations that servicers will treat all borrowers fairly and consistently, and comply with the Equal Credit Opportunity Act (“ECOA”), the Fair Housing Act (“FHA”), and other consumer protection laws and regulations. In addition to links to regulatory and Fannie Mae guidance, including the Consumer Financial Protection Bureau’s advisory opinion that ECOA applies to loan servicing, the FSBP includes recommendations for:

Throughout the FSBP, there is a focus on robust controls, monitoring, and testing. Servicers are encouraged to adopt the three lines of defense framework for fair servicing and to implement robust preventative and detective controls, including incorporating fair servicing concepts in quality control processes. There are several specific recommendations for monitoring and testing, including testing for disparities in:

In addition, Fannie Mae recommends evaluating complaints, deploying consumer surveys, testing the sufficiency of remediation efforts, and considering the engagement of specialized vendors to assist with fair servicing monitoring and testing. Fannie Mae highlighted using multiple communication channels, language line vendors or multilingual employees, and language action plans to assist LEP borrowers.

To summarize, Fannie Mae’s FSBP drives home the idea that fair servicing should be embedded in all aspects of a servicing organization. A robust fair servicing compliance management system starts with corporate culture. It should include all aspects of servicing by master servicers and their sub-servicers, including program, policy, and system changes.


ABOUT THE AUTHOR

Lynn Woosley is a Managing Director with Asurity Advisors. She has more than 30 years’ risk management experience in both financial services and regulatory environments. She is an expert in consumer protection, including fair lending, fair servicing, community reinvestment, and UDAAP.

Before joining Asurity, Lynn led the fair banking practice for an advisory firm. She has also held multiple leadership positions, including Senior Vice President and Fair and Responsible Banking Officer, within the Enterprise Risk Management division of a top 10 bank. Prior to joining the private sector, Lynn served as Senior Examiner and Fair Lending Advisory Economist at the Federal Reserve Bank of Atlanta. Reach her at lwoosley@asurity.com.

WASHINGTON, DC, March 14, 2024 – Asurity Technologies, LLC (“Asurity®”), a leader in consumer lending compliance software and advisory services, today announced that its RegCheck® system has been selected as the winner of the “Best Compliance Management Solution” award in the 8th annual FinTech Breakthrough Awards program conducted by FinTech Breakthrough, an independent market intelligence organization that recognizes the top companies, technologies, and products in the global FinTech market today.

RegCheck is a comprehensive loan-level automated mortgage compliance system designed to streamline compliance reviews for mortgage lenders, banks, due diligence providers, and regulators. RegCheck combines sophisticated technology with state-of-the-art APIs to make it faster and easier to integrate with any loan origination system. Integrations are simplified and facilitated with full data mapping and development assistance, and the product’s flexibility allows it to support hybrid versions and custom extensions of MISMO.

RegCheck covers the entire lifecycle from submission of loan data to the generation of the final compliance report. The results can be tailored to customer workflow and are readily configurable, so the user only sees the needed information. The compliance reports present data in clear, concise ways, showing test outcomes, the exact formulation that was used to establish the results, and a direct link to the legal citation applied to make the determination.

The solution offers comprehensive compliance testing of state and federal lending requirements, including HOEPA, QM, HPML, TILA, TRID, and more. Recent enhancements include support for TRID multiple disclosure loans, allowing users to detect issues with valid changes of circumstances and additional waiting periods instantly. Along with existing testing of escrowed flood insurance and appraisal requirements, RegCheck provides comprehensive support and coverage.

“RegCheck enables loan officers and compliance specialists to accelerate closings with greater confidence and accuracy, making loans more serviceable and saleable. The limitations of other automated compliance products often result in compliance failures in loan applications and data gaps,” said Steve Johansson, Managing Director, FinTech Breakthrough. “With its ease of use and reporting clarity, RegCheck delivers complete compliance confidence. Congratulations to RegCheck by Asurity on their 2024 ‘Best Compliance Management Solution’ win. We look forward to additional excellence and innovation as Asurity continually expands and enhances its platform.”

The FinTech Breakthrough Awards is the premier awards program founded to recognize the FinTech innovators, leaders and visionaries from around the world in a range of categories, including Digital Banking, Personal Finance, Lending, Payments, Investments, RegTech, InsurTech and many more.

“Our expertise in the industry enables us to anticipate our customers' needs, all the time informing our software development. Our product team has decades of compliance experience that our customers have come to trust and rely upon. Simply stated, RegCheck is built by experts, for experts,” said Andy Sandler, Founder and CEO of Asurity. “Thank you to FinTech Breakthrough for this honor. In this dynamic regulatory environment, our team is committed to helping our customers save time and resources by providing best-in-class solutions.” 

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