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The Consumer Financial Protection Bureau made additional changes to its mortgage rules on Friday in an ongoing effort to respond to lender concerns, but refused to yield to pleas that it delay the January implementation date.
September 13 -
The risk retention requirement was supposed to ensure lenders had "skin in the game" when making mortgages. Instead, regulators appear to have abandoned that concept by crafting an exception so large that most single-family mortgages will be exempted.
September 3 -
When it comes to financing the average middle-class American, our government-backed mortgage entities will accept nothing but the most pristine standards. Except when it comes to the millions of home loans for which the feds want lenders to toss standards out the window.
September 26
Ellie Mae (ELLI) plans to update its platform to help underwriters comply with the latest federal mortgage guidelines.
The fall release of Encompass360, the Pleasanton, Calif., company's mortgage-management system, will allow lenders to automatically assess eligibility with new ability-to-repay and qualified-mortgage rules, it said Monday. Regulators are currently revising their qualified-mortgage rules, which are designed to ensure that banks improve their underwriting standards, and a slate of new rules are expected to take effect in January.
Ellie Mae's new version of Encompass360 will include tools to test for compliance with the new rules, including debt-to-income calculators and discount assessment, a tool for assessing whether loans qualify as "risky" under the rules, worksheets that can be delivered to investors and alerts when loans fail to meet the standards. The program will also document the testing process to let underwriters show that they have followed the new guidelines.
The program will include the compliance and testing for five different types of QM loans, Ellie Mae said. It plans to release the updated version in November, and will introduce it to the industry at an event next month in Las Vegas.
"The challenge of complying with the new rules "will be demonstrating QM eligibility unequivocally to investors and establishing confidence in the soundness of the systems that were used to determine eligibility," said Ellie Mae President Jonathan Corr in the news release. "Encompass360 users will be able to point to the closed-loop nature of our single system of record and the advantages that this delivers."
