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Interthinx Tool Supports Lender Compliance With Fannie Mae’s LQI

""Interthinx"":http://www.interthinx.com/, an Agoura Hills, California-based provider of proven risk mitigation and regulatory compliance tools for[IMAGE]

the financial services industry, says its loan-level fraud risk tool, FraudGUARD, can assist lenders in complying with Fannie Mae's new ""Loan Quality Initiative"":https://www.efanniemae.com/sf/lqi/index.jsp (LQI).

This new initiative was introduced by ""Fannie Mae"":http://www.fanniemae.com/kb/index?page=home in February of this year in a ""letter to lenders."":https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/ll1003.pdf In its letter, the GSE noted that loan repurchase requests to lenders have increased in the past three years, highlighting the need for an improved approach for working with lenders to deliver loans that meet Fannie Mae's underwriting and eligibility guidelines.

Fannie Mae said it launched the LQI to identify and implement policy, process, and technology enhancements to improve the compliance with underwriting and eligibility guidelines and mitigate repurchase risk. The new LQI enhancements are intended to promote improved loan delivery data that is complete, accurate, and fully reflective of the terms of the mortgage. Fannie Mae said a

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primary focus of this initiative is on capturing critical loan data earlier in the process and validating it before, during, and immediately after loan delivery.

According to Interthinx, the the additional rules under the LQI will require lenders to meet stringent new guidelines. But the company says its FraudGAUARD tool can automate much of this process.

""The LQI requires lenders to validate borrower identity, Social Security numbers, undisclosed liabilities, and inclusion on the GSA [U.S. General Services Administration] or HUD excluded-party lists,"" said Gayle Shank, VP of product development for Interthinx. ""More than 50 alerts within FraudGUARD can help lenders comply with those requirements and reduce the potential for a repurchase request.""

For example, in the area of undisclosed liabilities, FraudGUARD has made it easier for lenders to quickly scan the industry for additional loans secured â€" or in the process of being secured â€" by the same borrower or property, Shank explained. Without an automated tool like FraudGUARD, it is nearly impossible to detect undisclosed properties or a borrower's intent to mislead a lender regarding occupancy, she said.

""FraudGUARD will help lenders focus on critical prefunding loan data validation now required by Fannie Mae,"" said Kevin Coop, president of Interthinx. ""It will also help lenders originate higher-quality loans as we work together to maintain market stability and reduce risk in both the primary and secondary markets. This is a positive step for the entire industry, and Interthinx is ready to provide support to lenders as they prepare for the June 1, 2010, compliance deadline.""

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