Mortech, a Zillow business providing mortgage technology software solutions for mortgage bankers and secondary market teams, has announced the release of new LPMI products and functionality to the suite of Consumer Financial Protection Bureau (CFPB) compliance tools built into Mortech’s Marksman product and pricing engine. Mortech released the compliance tools last November to allow loan originators to manage compliance upon intake, prior to the loan application entering the loan origination system, and has been adding functionality since then.
The newest tool added to the suite is a Lender Paid Mortgage Insurance (LPMI) module that allows the lender to pay the mortgage insurance (MI) premium for their mortgage customers. The one-time premium is added into the interest rate that is charged on the loan. Now, Marksman supports both LPMI and borrower-paid MI. If a borrower’s paid single premium is used, the points and fees calculation includes any portion of the premium that exceeds the FHA upfront mortgage insurance premium.
“From a compliance standpoint, since the MI premium is added into the interest rate, the charge is completely excluded from the QM points and fees test,” said Tom Erickson, mortgage industry and compliance specialist at Mortech. “This will make it an attractive option for some lenders. If a borrower’s paid single premium is used, the points and fees calculation includes any portion of the premium that exceeds the Up-Front Mortgage Insurance Premium (UFMIP) charged on FHA loans, which is currently at 1.75 percent. This option is now built into Mortech’s software.”
The Marksman Compliance Suite is a compliance management system designed to help lenders identify and address compliance issues early in the loan process, while providing the most accurate pricing available to borrowers, especially the specific compliance checks required for the Qualified Mortgage (QM) rule, including: APR/APOR rate check spread; applicable debt-to-income ratios; lender fees and points calculation; non-qualification due to loan risk; and lender or Borrower Paid Mortgage Insurance.
In addition to QM tests, Marksman also provides checks for higher-priced mortgage loans, Home Ownership and Equity Protection Act rules, investor eligibility through an exclusive partnership with AllRegs, and a workflow for anti-steering, where the loan officer can view and print an anti-steering disclosure form. All compliance tests are customizable, allowing loan managers to disable certain tests or make them mandatory. In addition, built-in auditing tools allow lenders to provide support in the case of a compliance audit.