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National Mortgage Professional
Sep 29, 2008

Comergence Compliance Monitoring launches TPO management and compliance monitoring service to help thwart broker-assisted fraudMortgagePress.comComergence Compliance Monitoring LLC, TPO management, fraud, compliance Orange, Calif.-based Comergence Compliance Monitoring LLC provides wholesale lenders a first-in-industry, outsource solution for third party originator due diligence and license compliance monitoring. Greg Schroeder, president, stated, "Most of the Mortgage Brokers in the industry are solid performers with strong credentials. However, industry studies show that for any given lender, 9-12 percent of their brokers are responsible for nearly 100 percent of their loan fraud. It is this group of bad actors that we help lenders weed out, and keep out, of their business. The key to our model is that we enable lenders to identify these risky brokers before they start submitting files--not after the damage is done." On the front end, an integral part of the Comergence solution is a robust background check of brokers as they apply to do business with a lender. That check includes license status and derogatory review, the National Fraud Protection Database (NFPD), lenders/industry sanctions, Social Security Number verification for principals, and much more. What is uniquely different about the Comergence service is that they conduct an on-site inspection and obtain notarized signatures on all lender documents and agreements. As a further deterrent to fraudulent submissions, Comergence takes broker compliance monitoring beyond basic license status verification to a new level of risk mitigation. Through the use of sophisticated predictive pattern analytics, Comergence proactively alerts lenders to brokers who have the potential for submitting loans associated with high fraud and default rates. By anticipating problems before they happen, lenders can implement various strategies to preempt fraudulent submissions. This powerful service also enables lenders to check for fraud and early payment defaults at the point of loan submission to reduce the chance of having to repurchase a bad loan. As a true outsource solution, Comergence Compliance Monitoring effective consolidates a redundant function among lenders and consequently is able to offer considerable cost savings over a lender's internal broker due diligence and monitoring departments. Lenders have reported 25--40 percent reduction in direct costs while acknowledging the significant additional savings associated with reduction in fraudulent submissions. Comergence also indemnifies lenders against any state fines or penalties that may result from doing business with monitored brokers whose license has expired or suspended. For more information, visit
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