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Red Flag Alert

Red Flag AlertRecent mortgage compliance activity

October 7, 2008


With less than a month until mandatory implementation, service providers are lining up to help lenders comply with the new Red Flags Rules. Other mortgage compliance activity includes opposition remains fierce to proposed Real Estate Settlement Procedures Act changes.

SecureWorks has launched a consulting service for financial organizations seeking help with the Fair and Accurate Credit Transactions Act’s new Red Flag Rules, which becomes effective on Nov. 1. Pricing for the consulting program ranges between $6,000 and $10,000, depending on the scope of the project.

FraudGUARD supports the mandatory requirements of the Red Flag Rules, Interthinx said in a recent press release. The fraud detection tool accesses public and proprietary data to generate more than 45 alerts that assist customers in fulfilling the requirements.

ComplianceOne 2.0 has been released, Wolters Kluwer Financial Services said in a statement today. The new version helps lenders address a growing list of new regulatory concerns, including the Red Flag Rules.

Expanded credit life insurance calculation functionality and support for open-end lending processes at credit unions are also among improvements to ComplianceOne. In addition, it helps institutions securely deliver digital documents to borrowers.

Mavent Inc.’s compliance validation services will be expanded to all LenderLive clients, an announcement today said.

Comergence Compliance Monitoring said yesterday that its third-party origination outsourcing services will now include BasePoint Analytic’s fraud and early-payment default risk management services for lenders and brokers. The enhancements also include broker loan risk scoring for lenders and pre-screening tools for broker .

“BasePoint has conducted several lender studies that showed that 100 percent of the lenders’ fraud and early-payment default losses were due to the loans submitted by only 8 to 12 percent of their brokers,”BasePoint President and Chief Executive Officer Tim Grace said in the statement.

Mortgage Cadence Inc. recently announced that it has engaged Weiner Brodsky Sidman Kider PC to provide expert insight and analysis on federal and state compliance and regulatory matters. The alliance will help Mortgage Cadence quickly adapt its loan documents as regulation changes.

“As the industry grapples with the large volume of new state and federal regulations aimed at providing greater protection to consumers, it becomes even more important for in-house legal and compliance departments to have access to knowledgeable and experienced service providers who specialize in these matters and who can provide timely and reliable results,” Weiner Brodsky Managing Partner Mitchel Kider said in the statement.

Attorneys’ Title Guaranty Fund Inc. issued a statement indicating its concern over proposed changes to RESPA by the U.S. Department of Housing and Urban Development. The firm noted that enabling bundled services would force smaller settlement service providers out of business.

“The packaging provisions are nothing more than a power grab by the big banks,” Attorneys’ Title CEO Peter Birnbum said in the statement. “A ‘closer’ would be in no position to answer pressing questions; and by reading the closing documents aloud, he or she would create the illusion of being a lawyer out to protect the consumer.”

U.S. Representatives Ruben Hinojosa and Judy Biggert issued a letter to the Office of Management and Budget calling for a rejection of the proposed RESPA changes and called for HUD to coordinate any changes with the Federal Reserve. The two legislators are also requesting that HUD publish an advance notice of proposed rulemaking that is open to public comment for 60 days.

They said HUD’s proposals will likely conflict with the Truth in Lending Act and the Equal Credit Opportunity Act — confusing borrowers subjected to different disclosures.

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