Absent Automation, Lenders at Risk for Non-Compliance, Says LoanSifter

Insufficient automation could cause non-compliance issues for mortgage lenders, credit unions, and banks when it comes to the extensive regulatory changes emerging as[IMAGE]

a result of the Dodd-Frank Reform Act, according to Bruce Backer, president of ""LoanSifter"":http://www.LoanSifter.com, an Appleton, Wisconsin-based provider of Web-based loan product and pricing tools.

""Lenders who have yet to adopt and implement automation in their loan production process are going to find themselves behind the 8-ball when these new rules

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begin taking effect,"" Backer said. ""Frankly, the mortgage industry is already so filled with compliance challenges that it will be extremely difficult for lenders to adapt to a whole new playing field without substantial help, specifically tools that automate disclosures, properly quote rates for consumers, and identify red flags.""

Passed by Congress and signed into law earlier this year, the Dodd-Frank Act represents the largest regulatory overhaul of the financial services industry in decades. Mortgage lenders are most affected by title XIV of the act, which sets national underwriting standards for residential loans.

""We can be certain that even more reforms are headed our way when the Consumer Financial Protection Bureau begins establishing additional regulations for the mortgage industry,"" Backer warned.""

For example, he said, ""[W]e anticipate the new agency will change how APR is calculated, which affects how lenders are able to use rate quotes in their marketing to consumers. A good automated solution will adapt to these new rules and future changes from behind the scenes, so lenders can be assured that their processes won't land them in hot water.""