Prior to TRID the vast majority of lenders outsourced the preparation of the HUD-1. It made sense to have the escrow agent balance and distribute the final HUD because of their role in disbursing funds.
Post-TRID Is a Different World, However, and With It Comes a New Level of Lender Liability.
Lenders have a huge responsibility to get the CD right. First, it has to be right to sell the loan to an investor without paying a discount to do so. Even if the loans are sold, they and their investors could face major fines, penalties, civil and even class action lawsuits, all because of assignee liability. Though a settlement agent may prepare the CD, they are not liable for its accuracy.
Industry reports indicate that some lenders are asking for indemnification from settlement agents at closing, in an attempt to shift some of the liability to the settlement agents. This approach has not gone over well with settlement agents, with good reason, as TRID clearly states lenders are liable for violations.
Many lenders have chosen to prepare all closing documents in house, refusing to take on the risk of outsourcing in addition to the initial liability. This is not a perfect solution either.
No Lender Is An Island
In-house document preparations aside, several parties still contribute to the loan file and CD. Therefore, it is almost impossible for the lender to oversee all actions and communications taken by every individual on the loan file. Though third parties may not prepare the actual form, they are still contributing data to that form. This means they can add liability to the transaction with every scribble and keystroke.
Lenders don’t have a choice on whether they outsource the Closing Disclosure or not. They already are.
Work With a Vetted and Verified Mortgage Team
ATS Secured has partnered with highly reputable title agents, who have joined forces to become 12th Floor Group. We are working to verify and vet every member of this group and place them on the ATS Secured Network, where they can conduct mortgage transactions in a secure, transparent environment.
Any company or individual can ask to join the ATS Secured Network, after which we will verify their identity, proving they are who they say they are, and put them through a vetting process. Once they have passed these procedures, they are eligible for an ATS Pro account.
Once on the network, mortgage professionals can interact with others on who have been verified and vetted. Should a lender choose to outsource such an important and detail-oriented form as the Closing Disclosure, it will be easier for them to trust a settlement agent with that task if they know the agent has been vetted and verified.
This concept applies not just to settlement agents, but also to all mortgage professionals. Having a complete overview of everyone contributing to the transaction can give lenders incredible peace of mind.
Review All Actions and Communications On the CD
But even if you can trust your fellow mortgage professionals on the ATS Secured Network, can you be sure they aren’t including errors in the loan file? Sure you can. The ATS Secured Network’s audit log tracks what, when, why and how each action/communication/data is entered in the loan file. This function empowers lenders to find potential violations before they turn into liabilities.
Have Access to Updated CD Forms and Documents
MISMO updates, uniformed data sets, HMDA/TRID forms and other highly sensitive documents that contain NPI will also be available on the ATS Secured Network, upon request, to appropriate parties in the mortgage transaction.
Lenders and settlement agents shouldn’t have to worry about whether they are looking at inaccurate, outdated or incomplete loan data. Every action and communication is recorded on one digital loan file, so there is never a piece of information that goes unnoticed or is forgotten about.
As a lender, you may not have a choice over whether you outsource the responsibilities of creating a mortgage. But you can choose ATS Secured and connect with the best mortgage partners available, be proactive in scrutinizing the entire loan file for violations as they occur, and have access to the most updated version of every loan file.