In the aftermath of subprime lending crisis, the mortgage industry took a massive hit. Since then it has been trying to build a solid ground for life-long success. Some part of this success can be credited to the Government Sponsored Enterprises’ – Fannie Mae and Freddie Mac, effort in building ground up, but this time on the foundation of data.

According to latest mandate in mortgage lifecycle, Fannie Mae and Freddie Mac will now require Closing Disclosures to be supplied in Uniform Closing Dataset (UCD) format starting September, 2017. This directive is implemented to help institutions enrich the quality of their data and keep the process more consistent.

The existing software used by the lenders in loan origination process lacks the ability to create compliance rich UCDs from current loan documents. As a result, many mortgage firms have to use manual re-entry or other such labor-intensive methods that are vulnerable to human error, resulting in CD image that does not correspond with UCD data which is a compliance violation.

UCD: The Ultimate Data Makeover for Lenders

At this point, bankers need to gear up for the upcoming policy change and incorporate innovative technologies to adhere to new processes required for data delivery. Needless to say, with the improvement in consistency and accuracy of data related to borrowers, property and the loan, mortgage industry will be able to build a more sustainable future for the lending system.

Uniform Closing Dataset has been designed to set standard procedures for delivery of loans to Fannie Mae and Freddie Mac as part of closing disclosure mandated by Consumer Financial Protection Bureau. With the directive set to begin soon, lenders should prepare themselves to scale their operations in order to incorporate this change. GSEs have already announced that by the end of 2017, the use of UCD will become compulsory.

Potential Challenges in Implementation of UCD Delivery

Now that the upcoming change is just round the corner, is your organization prepared for obligatory delivery of UCD to the GSEs? There are plenty of challenges that will be experienced at the onset of implementation that require solutions.

One of the leading trials in implementation of UCD rollout is adoption of turnkey technologies across all organizations. For the UCD to function seamlessly, automated flow of information throughout channels should be consistent and uninterrupted.

if, due to any reason, the flow of information breaks in the process of being transmitted and is required to be reentered by agents, then the prospect of human error is introduced into the dataset, thus defeating the purpose of UCD. The whole idea of implementing this dataset is to purge the mortgage process of human error. The only way to keep the dataset reliable at the end of a mortgage transaction is by allowing data to travel freely from each platform with least obstruction.

Integrating Change

The industry and its key players – lenders, underwriters, and agents – have displayed valuable commitment towards the implementation of TRID, that has developed compatibility across silos and taught important lessons to these stakeholders.

For the industry players to embrace change, they need high functioning technology that has been designed after taking inputs from all these stakeholders. This will help keep UCD and regulatory requirements within a single fold. The lender can either choose to purchase an end-to-end technology from one company or use several products from multiple vendors, but continuous transfer of UCD should never be compromised.

Today, the mortgage industry needs expert and elegant solutions to produce a fully GSE compliant UCD. This loan origination solution should be designed to address the issues related to UCD compliance as well as help overcome usual challenges. The new system should be smart enough to solve or prevent UCD preparation snags, such as inconsistent language between Mortgage Industry Standards Maintenance Organization (MISMO) and closing disclosure, several different versions of CD, ill-formatted closing disclosure etc.

How Our Expertise Will Make a Difference

Although LOS providers assure lenders that a seamless solution for UCD requirement is underway, a seamless solution for UCD, in the end, it doesn’t look so seamless yet. There are some LOS’s that generate the UCD XML which you must manually upload to GSE websites and then see if you get any errors. Other LOS’s require you to QC the data even before generating the XML. Any data mismatch between the CD and UCD may result in compliance violation hence the stakes a very high. Essentially it has come down to some manual intervention required for the Lender to submit UCDs and if your post-closing team is already backed-up, this additional task will only create more problems. This is where Expert Mortgage Assistance, can step in to save the day for you. We can assist you with this process irrespective of the LOS system you use. Be it for the manual upload of XML to GSE websites or a compliance check for the data being sent through the XML, we will get you covered with our services and solutions.