The mortgage technology firm Ellie Mae has launched a mortgage origination product designed to help mortgage-originating CUs both manage their compliance burden and produce mortgages that can more easily move to the secondary market.
The "Total Quality Loan" program builds upon the firm's Emcompass360 mortgage origination platform that Jonathan Corr, chief strategy officer for the firm, said between 400 and 500 credit unions use already.
The TQM platform will allow CU users to do two things, according to Corr. First, it will more easily make sure the credit union's mortgages comply with the new regulations that are coming in the wake of the financial reform legislation. Second, it will enable investors down the line who might want to buy the loan to find data about it more easily.
"Quality and compliance are major concerns for lenders, who need to comply with new regulations, avoid potential fines and minimize buy-back risk while also making sure loans are of salable quality," said Corr. "They need tools that address specific regulations as well as investors’ quality standards throughout the entire mortgage process."
Corr explained that the new platform will allow investors to see data about the loan's compliance and underwriting earlier and thus move more quickly if they decided to buy it and the CU was willing to sell.
"We believe this will help make loans less expensive and cut the amount of time needed to process loans for sale," Corr said. "We think we can eliminate a number of redundancies in the system."
Corr said the new software package will be able to comprehensively provide automatic compliance checks throughout the entire mortgage cycle and will include an integrated verification solution that allows users to electronically order tax return data from the IRS and automatically compare it to the income stated by the borrower. The program also provides access to Fannie Mae’s Early-Check, a delivery data check process that identifies issues that could impair the loan’s salability early in the process and prior to loan delivery, Corr said.
Future versions of the program will integrate more services into the Total Quality Loan program, including a credit and collateral fraud prevention service powered by CoreLogic.
"Two big challenges for originators right now are the speed at which regulations are changing and the lack of clarity on how to best implement solutions that address those regulations," said Corr.