AARMR joins growing community of regulators improving customer protection by automating mortgage examinationsMortgagePress.comComplianceEase, AARMR, ComplianceAnalyzer, David Bleicken, CSBS
ComplianceEase, a provider of mortgage risk management
solutions, has announced that the Board of Directors of the
American Association of Residential Mortgage Regulators (AARMR) has
approved the adoption of examination automation solutions for its
members, selecting ComplianceAnalyzer and RegulatorConnect to power
a new era of mortgage lending oversight that is more comprehensive,
yet requires less time and cost from the industry.
ComplianceEase's technology platform will enable state-regulated
mortgage brokers, lenders, and servicers to electronically transfer
loan information to regulators, reducing costly dependence on paper
files. Most importantly, the examinations themselves will leverage
ComplianceAnalyzer's objective compliance reviews, which are also
readily available to licensees through more than 30 mortgage
technology platforms.
"This initiative will dramatically improve mortgage regulation
with faster and more comprehensive examinations," said David
Bleicken, president of AARMR. "That means better protection for
both consumers and global markets. This initiative also proves that
the states continue to be at the forefront of regulatory
innovation. This cutting-edge loan review technology builds upon
the work the states have done in building the Nationwide Mortgage
Licensing System and Registry, a sophisticated, web-based platform
for mortgage licensing and supervision that will enable the states
to track bad actors across the country and coordinate supervisory
efforts. This fall we will, for the first time, be launching
coordinated, multi-state examinations of a number of the largest
mortgage companies. Collectively these initiatives form a powerful
regulatory program that the states will be using together to
regulate the mortgage industry more effectively."
Neil Milner, president and CEO of the Conference of State Bank
Supervisors (CSBS), addressed the state regulators' standardized
approach to reviews, saying, "CSBS, AARMR and other regulatory
agencies are working together across multiple states to improve
regulatory enforcement and oversight in order to ensure the safety
and soundness of these state-regulated financial institutions. By
leveraging the latest technology to supervise and examine financial
institutions in a seamless, flexible and risk focused fashion,
consumer protection can be continuously improved."
Following the selection of ComplianceEase by CSBS in April of
this year, the new mortgage examination technology is already in
use by many state banking/mortgage regulators. The regulatory
community chose to leverage technology to increase the scope of
examination from traditional sampling to upwards of 100% of loan
portfolios. It also enables regulators to streamline their
regulatory process through standardized examinations. Current plans
call for all 50 states and the District of Columbia to sign on to
the new AARMR and CSBS sponsored automated examination initiative
by the end of next year.
The ComplianceAnalyzer system enables regulators to unify
oversight in ways that were not possible with previous manual
examination processes. The system provides examiners with detailed
loan-level audit reports that encompass Federal, state and
municipal high-cost/predatory and rate spread regulations as well
as license-driven state consumer credit compliance reviews of usury
and interest rate limits, late charges, prepayment penalties, and
allowable fees and charges. Additional tests of consumer-facing APR
and finance charge disclosures are powered by ComplianceEase'
proprietary Truth-in-Lending calculation engine. Moreover, all of
the systems baseline regulatory reviews are standardized across the
industry, for industry participants and regulators alike. Audits
can be expanded to cover other areas of compliance such as
Government Sponsored Enterprise (GSE) compliance guidance,
guidelines for Federal Housing Administration (FHA) insured loans,
and customized regulator-specific rules and policies. The
regulators'initiatives will also employ the RegulatorConnect
platform, which leverages ComplianceEases existing technology
integrations and partnerships within the mortgage industry to
provide state-regulated institutions with an easy way to
electronically transmit loan information to state regulators.
John Vong, CMB, president and co-founder of ComplianceEase,
commented, "These initiatives the state regulators are embarking on
represent the wave of the future for regulatory supervision. The
old method of combing through a handful of paper files to identify
violations, patterns and trends is simply too time-consuming to
deliver cost-effective examinations. Using technology and
standardized reviews should reduce the amount of time examiners
need to spend on a given institution. Our analytic reports can
point the examiners to focus in the risky areas that they need to
spend time on, enabling them to 'do more with less.' The ultimate
goal is to achieve efficiency, effectiveness, uniformity and
standardization of oversight while reducing the cost and burden to
regulators and to the industry."
AARMR and CSBS have begun educating their member regulators
about the new technology-based examination initiative through
"Future of Mortgage Examination" panels and educational sessions at
member meetings and conferences. The use of ComplianceAnalyzer and
RegulatorConnect has also been incorporated into the curriculum of
the "Advanced Residential Mortgage Examination School" offered to
state regulators by CSBS.
For more information, visit www.aarmr.org, www.csbs.org or www.ComplianceEase.com.
