Tuesday, March 01, 2005

Compliance in the LOS

I've been writing a lot lately about compliance at the point-of-sale. If you subscribe to Real Estate Technology Insight, an October Research Corporation newsletter, which I recommend, you'll find my cover story in the current issue. It's nice to see technology catch up to a good idea.

Anyone who has ever been in charge of quality control for a wholesale lending operation will tell you that it makes a whole lot more sense to make certain that the loan is fully compliant before the application is ever uploaded into the processing system than it does to try and catch it after resources have already been expended on the deal. Before technology made it possible to look over the loan officer's shoulder as the 1003 was being completed, it just wasn't feasible to QC the loans as they were being originated. Lenders had to wait, often until the loans were funded, and then look back at a portion of them (usually 10 or 15 percent) to check for compliance.

Today, companies like AppIntelligence, PCi, ComplianceEase, QuestSoft, Document Systems and others can ensure that the loan is compliant either at the point-of-sale or before the document is ever printed.

This may be on my mind today because I saw PCi's announcement today about its integration with the ELS loan origination system.

But in a year or so, even this is likely to be outdated technology if Fannie Mae has its way. If you've heard about the GSE's eQC program, you know what I'm talking about. If that flies, compliance firms may have a harder time explaining why they are a necessary part of the transaction.

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