OpenClose's loan origination software has been updated with new functionality to help lenders adhere to the Consumer Financial Protection Bureau's (CFPB) new qualified mortgage (QM) and ability-to-repay (ATR) rules.
OpenClose reports that it began development of the new functionality well in advance of the CFPB's Jan. 10 implementation deadline.
With the new updates, lenders gain an LOS platform that is not only rules ready but which also streamlines the processes associated with compliance.
For example, while at the point-of-sale, the loan officer takes the 1003 application, selects a product, and clicks a QM button that returns a decision if the loan would be QM or non-QM. If the loan meets QM guidelines, an evaluation report and ATR certification are provided for the lenders' records.Â
Once the loan has been decisioned, it seamlessly moves through OpenClose's LOS workflow, where ir is continuously checked in the background on a screen-by-screen basis for any changes that affect QM requirements.Â If a change is detected, an alert appears on the screen that the user is working on, which provides a pass/fail indicator along with messaging as to why there was a QM fail so the user can address it and proceed.
Custom business rules can be configured within the LOS to meet lenders' specific workflow preferences and easily implement any new rules the CFPB introduces.Â As a result, lenders are able to turn on a dime and remain QM compliant given changes to guidelines or the introduction of new rules.
‘A lot of technology vendors are just jumping on the band wagon and touting QM readiness,’ says Rob Pommier, senior vice president of business development and strategic alliances at OpenClose. ‘But there are lots of changes to LOS code bases that vendors must design, implement and test before being rolled out into a production environment. That's no easy task. It took us many months of development and making alterations to our graphical user interface (GUI) in order to ensure that our end-to-end system is what I term 'bulletproof QM ready.'’
‘The work that OpenClose has done to its LOS to meet QM rules has made our jobs incredibly easy,’ says Colleen Thingelstad, director of real estate lending at Horizon Credit Union.Â ‘We don't need to think; the system automatically does everything for us.Â It has literally saved us countless hours of work, and our investors are very comfortable with accepting the system's findings.’
‘One of the problems technology vendors have been encountering with QM implementations has to do with using multiple disparate applications that must have code added to them,’ she adds. ‘Some vendors used a best-of-breed approach to create an end-to-end platform while others simply acquired various technologies. In either case, these formed solutions aren't native to the vendor's core platform, and thus, they are challenged to seamlessly control data throughout workflows. There is also a bucket of vendors that have antiquated software or are resource constrained, which limits them from implementing QM functionality.’
OpenClose reports that it provided training to its clients in order help them properly utilize the added QM functionality.Â This included individual hands-on training, webinars and detailed supporting documentation.
The company reports that all its clients are now fully ready to accept, process and deliver QM loans to investors, in full accordance with CFPB rules and underwriting guidelines.