Interthinx has announced that the Qualified Mortgage (QM) test in its PredProtect Regulatory Compliance Automation Suite will be available in early October. This will provide its clients with test access a full 90 days before the Consumer Financial Protection Bureau (CFPB) rule enforcement date. Interthinx is a leading provider of comprehensive compliance and risk mitigation solutions for the financial services industry.
PredProtect helps banks and mortgage lenders comply with numerous laws, regulations, and investor requirements at the federal, state and local levels by running multiple compliance checks in real time and alerting lenders to potential violations so compliance errors can be corrected before funding.
Created by the Dodd-Frank Act, the new QM rule provides a legal safe harbor from borrower accusations that an originator failed to comply with the new Ability to Repay rule. As a result, every residential mortgage transaction will need to be identified as a Safe Harbor QM, Rebuttable Presumption QM, or non-QM loan beginning January 10, 2014.
"Mortgage technology vendors are taking widely different approaches to automating compliance checks for QM and the Home Ownership and Equity Protection Act (HOEPA) rule," said Roger Fendelman, Interthinx vice president of compliance. "Some vendor solutions do not handle complete QM decisioning, while other companies are waiting until later in the year to release their tests. Year-end holidays run from mid-November to New Year's Day, and with so many originators' internal processes dependent on their vendor's ability to deliver, it's imperative that these tests be made available at least 90 days before the enforcement date."
The PredProtect QM test includes critical requirements such as the three percent fee cap, 43 percent debt-to-income ratio test on "noneligible" loans, higher-priced mortgage loan thresholds to determine whether a loan qualifies for safe harbor or rebuttable presumption QM protection, and more. PredProtect delivers QM test results in an easy-to-use worksheet with clear explanations written in plain English. In addition, the PredProtect proprietary technology automatically determines which fees apply, including fees paid to affiliates and sophisticated bona fide discount point exclusion calculations. Built to enable complete compliance, PredProtect allows frontline staff to perform accurate QM tests without the expertise of more experienced compliance specialists.
"Time is quickly running out in preparing for the enforcement of the Qualified Mortgage rule," said Jeff Moyer, president of Interthinx. "Our customers need time to acclimate themselves to this game-changing rule, and they need to have the confidence that their compliance solutions are up to the task."
"Interthinx prioritized the build-out of its QM tests in PredProtect so that on New Year's Eve, PredProtect customers will be ringing in 2014 instead of wringing their hands over QM," added Moyer.