Mortgage Banking Systems Adds ComplianceAnalyzer to ProClose

December 23, 2004

MCLEAN, Va. -- Mortgage Banking Systems, Inc., a provider of mortgage closing document services and technology, has added ComplianceAnalyzer(R) to its ProClose(R) platform. ProClose document preparation system provides customers an extensive library of investor and industry standard forms, electronic delivery of closing packages, extensive and customizable reports, as well as numerous third party software interfaces.

The addition of ComplianceAnalyzer means ProClose now delivers one-click, seamless access to industry-leading compliance analysis technology, along with detailed compliance reporting capabilities--automatically integrated within the document closing process.

Fidelity and Trust Mortgage Inc., a national mortgage company, is the first company to implement ComplianceAnalyzer as part of an electronic document preparation system. "We chose this software because a Genesis upload is available and it is web-based, so we can use the product without an interface. Also, it is simple to use, which makes our employees happy," said Dan Macy, quality control manager, Fidelity and Trust. "With new loan regulations emerging every day, we need a robust solution to keep us in compliance."

The most common reason for investor repurchase requests is non-compliance with federal, state or local "high-cost," anti-predatory lending laws, state regulations and investor compliance guidelines. ComplianceAnalyzer organizes results of compliance reviews into one easy-to-understand screen. Additional screens provide specific detailed results of compliance reviews. With a single click, users can access a complete trail of compliance reviews. When potential violations or exceptions are detected, the system provides narrative explanations. ComplianceAnalyzer's reports easily reference reasoning, calculations, citations, and text of relevant legislation.

"Mortgage originators that sell into the secondary market must take every precaution to minimize costly repurchases," advised Christine Kirby, president, Mortgage Banking Systems. "The overwhelming rise of state and local lending legislation has rendered obsolete the traditional, manual processes of auditing loans by hand or by using simple spreadsheet applications," Kirby said.

Nationwide expansion of anti-predatory laws has required that mortgage originators maintain robust, transaction-level compliance auditing, as well as efficient and accurate closing documents. ComplianceAnalyzer utilizes advanced natural language processing and rules-based decisioning to produce a single, high-detail loan-level audit report that analyzes a loan's compliance with all applicable federal, state and local regulatory compliance requirements.

As of November 18, there are 33 states and municipal districts with "high-cost" lending laws, in addition to existing federal laws and other state regulations. Many of these state high-cost laws incorporate assignee liability relating to damages and fines associated with non-compliance. The issue of assignee liability has dramatically raised the stakes for investors, forcing the investment and credit rating community to encourage the use of automated compliance. In Fitch's November 13, 2003 report, the rating agency asserted that, "an originator's use of a technology-based filter in the compliance process is viewed positively by Fitch. In fact, Fitch cannot provide credit for the compliance process without it."

Source: Mortgage Banking Systems

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