ComplianceEase has added new functionality to its ComplianceAnalyzer automated mortgage compliance system that the company says enables lenders and brokers to comply with tough new lending restrictions that are set to take effect in California on July 1.
By using the system to automate loan-level compliance audits during the origination process, lenders and brokers can find and fix violations of the new California provisions, as well as federal statutes – all of which now carry with them the possibility of a suspended or revoked license in the state, the company explains.
The new restrictions are part of California's Assembly Bill 260, which was signed by Gov. Arnold Schwarzenegger in October 2009. Under the new law, loan originators can have their licenses suspended or revoked for violating certain federal lending laws. Among the specific federal lending regulations named in the new law are the Real Estate Settlement Procedures Act, the Truth in Lending Act and the Home Ownership Equity Protection Act.
Regulations pertaining to "higher-priced mortgage loans" will impact loan originators starting July 1. If a loan meets the attributes and thresholds that place it in the "higher priced" category, originators face increased risk from some prohibitions that are much more subjective, including making "deceptive" or "misleading" statements about the loan to borrowers, ComplianceEase says,
ComplianceAnalyzer now allows lenders, brokers, and regulators to identify whether a loan falls under the new "higher priced" category.
"We built ComplianceAnalyzer from the very beginning to support automated loan reviews that span multiple jurisdictions and that cover everything from high-cost lending restrictions to consumer credit laws and fee restrictions," says Jason Roth, senior vice president and co-founder of ComplianceEase, adding that nearly 20% of ComplianceAnalyzer audits are on California loans.
"It's clear that these new restrictions are going to have a large impact on the mortgage industry as a whole," he says.