Compliance Automation Excellence with TruHome Solutions
Author: Eileen Linn, Sr. Customer Marketing and Advocacy Manager, Ellie Mae
The demanding regulatory requirements in today’s mortgage industry are pushing lenders to focus on compliant origination more than ever before. The timely delivery of accurate disclosures is of critical importance, but keeping track of the various due dates can be a challenge. To cope with these demanding requirements, TruHome Solutions developed an innovative way to both manage disclosure timeliness and ensure data accuracy within the Encompass® Digital Lending Platform. Their creative solution had huge benefits in ensuring compliance while saving their business money and time.
TruHome provides a full range of private-label services to credit unions nationwide, including flexible and compliant mortgage solutions. Due to the cost of production and the demanding regulatory requirements, many credit unions are unable to offer mortgage products. TruHome provides the opportunity for members to keep their mortgage with their credit union, where they are most comfortable, while maintaining the same level of service they have come to expect.
They were challenged in 2018 when their team identified that the Uniform Residential Loan Application (URLA) fields within Encompass® were different from many of the Home Mortgage Disclosure Act (HMDA) reporting fields, which required them to manually enter the HMDA information. This created the opportunity for data inaccuracies, as well as fostering inefficiencies within their mortgage process. So, given the changes to HMDA reporting requirements that same year, TruHome focused on streamlining their process and providing accurate HMDA data using exception tracking and dashboarding. They started their journey to find a way to manage their disclosures’ timeliness as well as ensure the data within Encompass was complete and accurate for all their credit union partners.
To address the timing requirements for disclosures, TruHome leveraged the dashboards within Encompass. They were set up to identify the loans in need of disclosure and sort them by due date. And by utilizing Mavent Compliance Service™ within Encompass, they verified the timeliness of the disclosures, as well as the compliance of the data entered in the loan file. The TruHome team members were trained to review the Mavent Compliance Report and address any concerns immediately.
And while they took all efforts to disclose timely and accurately, tolerance cures can be unavoidable. Given TruHome’s business model of private label origination for their credit union partners, the responsible party for the cure can vary from loan file to loan file. Therefore, they created a custom input form that documents each tolerance cure, reason for cure, amount, and responsible party. This allows TruHome to report on this data and use it to identify areas of concern or provide training to their partners and internal staff. Since implementing the new input form and reporting process, TruHome saw their average cure amount per loan file drop from $22.91 in July 2016 to $8.93 per loan file in August 2018.
By automating their HMDA data entry completely, they saw dramatic improvements in both efficiencies and data accuracy. Their team previously spent 4,923 hours in 2017 dedicated to HMDA data entry for 19,692 loans. With the automation of that process, TruHome was able to re-allocate those resources to different areas of production which allowed for increased efficiencies throughout their organization.
To other lenders, TruHome recommends that they “automate, automate, automate.” By leveraging automation within Encompass, they were able to do more with less resources, while still ensuring quality loans and compliant solutions.