Burlingame, Calif. - Jan. 25, 2018 - ComplianceEase®, the nation's leading provider of automated compliance solutions to the financial services industry, today announced that its compliance management platform, ComplianceAnalyzer® with TRID Monitor™, can now test TRID, RESPA 2010 and pre-2010 forms to validate California's per diem interest calculations.
According to a May 2017 release from the California Department of Business Oversight (DBO), "under the per diem statute, a borrower cannot be required to pay interest for more than one day prior to the disbursement of loan proceeds from an escrow on a principal obligation under a promissory note secured by a mortgage or deed of trust on real property with up to four residential dwelling units" unless certain exceptions apply. Four of the top ten non-bank lenders in the nation have been fined a total of $13.3 million in the last year and a half due to per diem interest calculation violations. The overcharging of per diem interest remains one of the most common violations by lenders.
The California Per Diem Interest Test in ComplianceAnalyzer audits a lender's calculation for the maximum allowable amount of additional per diem interest that may be charged (or the minimum amount of interest to be credited), and based on the data provided, will provide a "pass," "fail," or "not tested" (typically due to lack of data) result. The new functionality is automatically applied if a lender selects a California License (i.e., Finance Lender License, Real Estate Broker License, Real Estate Corporate License, Residential Mortgage Lender License, or Exemption Letter) or selects the California Regulatory Examination Lending Policy.
In addition, examiners using ComplianceAnalyzer® with TRID Monitor™ can perform audits that apply the California Per Diem Interest Test by using the new Lending Examination Format (LEF) file for electronic examination (e-Exam).
"One would think that the per diem interest calculation should be simple and straight forward, but it is not the case for California. Many lenders are still relying on their loan origination systems (LOSs) for compliance auditing, but I would compare that to a sales deal involving snow and Alaska; unfortunately, it's a fool's errand. LOSs are in the business of originating loans. Regulatory compliance is an altogether different animal. Additionally, violating California's rules for per diem interest can be a costly error for lenders," said John Vong, president of ComplianceEase. "With ComplianceAnalyzer's new California Interest Per Diem Test, lenders will be able to audit all of their documents to ensure compliance and to correct any variances before they become violations. It will also help regulators by eliminating manual work during the examination process."
Headquartered in the Silicon Valley, ComplianceEase, a division of LogicEase Solutions Inc., is a leading provider of risk management solutions to the financial services industry. ComplianceEase's patented platform includes ComplianceAnalyzer®, the mortgage industry's most adopted automated compliance solution with the most comprehensive TRID auditing. ComplianceEase combines regulatory expertise with innovative technology to power end-to-end risk management solutions that help financial institutions improve compliance controls and increase profitability. The company's growing client base includes financial institutions, service providers, law firms, GSEs, and three of the top five mortgage lenders in the U.S. ComplianceEase's automated compliance solutions have also been adopted as e-Exam tools by federal and state banking and mortgage regulators. For more information, visit ComplianceEase.com or call 1.866.212.Ease(3273).
ComplianceEase®, ComplianceAnalyzer® and TRID Monitor™ are registered trademarks and trademarks of LogicEase Solutions Inc. All other trademarks are their respective owners.
Campbell Lewis Communications