LoanLogics has enhanced its LoanDecisions product with a new Fair Lending feature designed to satisfy the Consumer Finance Protection Bureau’s Fair Lending audits that are more in-depth than in the past and seek to enforce provisions of the Fair Housing Act and Equal Credit Opportunity Act.
“Lenders that use this feature can combat implications of disparate impact or treatment because they can provide the CFPB with an audit trail proving that the borrower was given the best program, price and lock period available,” said Matt Thoman, product manager for Origination Technologies at LoanLogics. “This demonstrates that the borrower received the best deal. This decision can be tied back to the lender’s pricing policy.”
The CFPB has stated on numerous occasions that lenders must be able to explain the reasons for offers provided to borrowers during Fair Lending audits. LoanDecisions Fair Lending feature records as much data as possible and captures the reasons for each decision the lender made in the process of originating the loan.
For instance, the solution identifies the loan with the best price. If this pricing option is not selected by the loan originator, then the originator will have to record the reason for the decision. This data will then be available to the lock desk team in real time during the lock confirmation process, allowing the lock desk to confirm or deny the lock based on the originator’s reasons.
A loan level report will be produced by LoanDecisions on every loan for the compliance team. This report can be referenced during an audit. Pipeline reporting is also enhanced so lenders can indentify how much of their pipeline is locked at the system-identified best execution and what loans require further explanation.