Effective April 1, 2011, Section 226.25 of Federal Regulation Z, subsection (a) General Rule, requires for each transaction subject to the loan originator compensation provision that the creditor maintain records of compensation it provided to the loan originator for the transaction as well as the compensation agreement in effect on the date the interest rate was set for the transaction. The creditor must retain records to evidence compliance with Regulation Z for at least two years after a mortgage transaction is consummated.

“By utilizing our comprehensive TPO management compliance system, Lenders can now use the document management portion of our system to initiate, distribute, renew and retain their Loan Originator Compensation Agreements and house these agreements within the complete and comprehensive Mortgage Broker profile database we establish for each lender,” said Schroeder. “Comergence Compliance Monitoring has worked diligently to establish processes that would constitute best practices for this portion of the Truth in Lending Act.”

Schroeder notes that independent Mortgage Brokerages can also utilize the Comergence system for the management and administration of their requirements to produce, manage and maintain individual Loan Officer Compensation Agreements. “Our system can facilitate the sharing of these individual agreements with each lender the mortgage broker is contracted with if the lender wishes to review them.”

“The added service that CompEditor provides takes a heavy financial burden off the lenders to create systems on their own when their resources are already heavily taxed,” said Schroeder.

About Comergence:
Comergence Compliance Monitoring, headquartered in Orange, California, is the mortgage industry’s premier GRC solution for TPO management and compliance monitoring providing a comprehensive alternative to a lender’s in-house management and monitoring resources. Using a variety of best-practice processes, proprietary monitoring technology and hands-on service protocols, Comergence provides customers unparalleled simplicity, security and quality.

For more information about Comergence Compliance Monitoring, visit www.comergencecompliance.com .

News Source: Comergence Compliance Monitoring :: This press release was issued on behalf of the news source by Send2Press® Newswire, a service of Neotrope®. View all current news at: http://Send2PressNewswire.com .

“Until now, this type of insurance was only available to large mortgage bankers so this really levels the playing field even more for the small independent mortgage originator,” said Greg Schroeder, president of Comergence. “Additionally, some states already require mortgage brokers to carry Errors and Omissions insurance. Our policy also satisfies those requirements while providing the broker additional protections.”

The Comergence Mortgage Broker Fidelity Bond provides protection in the event of acts of fraud or theft by employees intended for personal gain, or to cause harm or loss to the insured mortgage broker. Coverage is also extended to cover acts of attorneys or loan closing agents that perform services in connection to a real estate loan.

Acts covered by the mortgage broker fidelity bond include:
- Forgery;
- Fraudulent mortgages, including procurement of a mortgage investors money or collateral; and
- Computer crime.

The Comergence Mortgage Errors and Omission Policy covers actions that would fall under the legal definition of negligence. Examples include:
- Failure to obtain or maintain required property insurance, including flood coverage;
- Improper flood zone determination;
- Failure to secure FHA/VA/PMI guarantees;
- Failure to obtain or maintain life or disability insurance on the mortgagor; and
- Failure to pay real estate taxes or special assessments.

“Comergence has always sought to be a champion of best practices for the wholesale mortgage lending industry. Before we created this coverage, we met with many lenders to build a product that would provide a greater level of protection for both parties and eliminate the time and expense of obtaining audited financials,” Schroeder explained.

“Mortgage brokers facilitate the largest financial transaction most consumers will ever undertake, and even a single buyback request from a lender could easily sink a brokerage firm,” he added. “It only makes sense that brokers should protect themselves against employee and borrower dishonesty and fraud because, as the past has shown, it only takes a one bad apple to bring down an entire organization.”

About Comergence:
Comergence Compliance Monitoring, headquartered in Orange, California, is the mortgage industry’s premier end-to-end solution for TPO management and compliance monitoring, providing a comprehensive alternative or supplement to a lender’s in-house management and monitoring resources. Using a variety of best-practice processes, its proprietary Realm monitoring technology and hands-on service protocols, Comergence provides lenders unparalleled simplicity, security and quality.

For more information about Comergence Compliance Monitoring, visit www.comergencecompliance.com.

News Source: Comergence Compliance Monitoring :: This press release was issued on behalf of the news source by Send2Press® Newswire, a service of Neotrope®.

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STORY REFERENCES: Comergence Compliance Monitoring Provides Mortgage Lending Third Party Originator (TPO) Fidelity Bond, Errors and Omissions Policy through Insurance Subsidiary, Comergence Compliance Monitoring, mortgage brokers, third party originator, TPO, Greg Schroeder, broker due diligence, wholesale mortgage lending

Through the enhanced functionality of Realm 2.2, lenders have the ability to create custom alerts for credit and regulatory risk, electronically store documents on approved TPOs, assign and manage TPOs according to lender-defined criteria, and correspond directly with TPOs through internally branded, customizable electronic communications, including requests for TPO recertification as required by Fannie Mae.

Realm 2.2 also includes functionality to support lenders’ efforts in creating a fully electronic lending environment. Included in the updates is an application programming interface (API) that integrates Realm with a lender’s LOS so that data can be electronically transferred from Realm to the other system. Additionally, Realm 2.2 also allows lenders to accept electronic signatures for required documents through the system.

“The first half of 2010 has seen a dramatic shift in the regulatory landscape, putting compliance issues at the top of the list of mortgage originators’ concerns,” said Greg Schroeder, president of Comergence. “The updates to Realm reflect Comergence’s commitment to assisting both lenders and brokers in meeting the new demands of a stronger regulatory environment through enhanced due diligence and risk management.”

As added assurance to its reverse mortgage lender customers, Realm 2.2 also enables lenders to perform due diligence checks and verification to determine if a broker has or has ever had a securities license.

“Our reverse mortgage customers are extremely sensitive about protecting their potentially vulnerable clients,” Schroeder added. “This important addition to the Realm platform enables reverse mortgage lenders to ensure their approved brokers aren’t able to convert reverse mortgage proceeds to sell securities recklessly or inappropriately to that market niche.”

For TPOs who are members of Comergence’s Trusted Mortgage Professional program, Realm 2.2 enables them to electronically submit documentation to over 150 lenders listed in Comergence’s wholesale database, saving the TPO both the time and cost of creating documentation packages for each lender individually.

For more information on the additions to Realm 2.2, contact Michael Stallings at 714-495-4722.

About Comergence:

Comergence Compliance Monitoring, headquartered in Orange, California, is the mortgage industry’s premier end-to-end solution for TPO management and compliance monitoring, providing a comprehensive alternative or supplement to a lender’s in-house management and monitoring resources. Using a variety of best-practice processes, its proprietary Realm monitoring technology and hands-on service protocols, Comergence provides lenders unparalleled simplicity, security and quality. For more information about Comergence Compliance Monitoring, visit www.comergencecompliance.com .

News Source: Comergence Compliance Monitoring :: This press release was issued by Send2Press® and is Copyright © 2010 Neotrope® News Network – all rights reserved.

The recently signed clients include:
* Gateway Funding Diversified Mortgage Services, L.P. is a full service mortgage banking firm with it’s headquarter in Horsham, PA. Established in 1994, Gateway Funding has grown to become one of the largest privately-held mortgage companies licensed in most states. For additional information on Gateway, visit https://wholesale.gateway-funding.com .

* Real Estate Mortgage Network (REMN), a national direct mortgage lender headquartered in River Edge, N.J. With more than 600 employees located throughout the East Coast, REMN has issued more than $600 million in Ginnie Mae and Fannie Mae securities. In 2009, REMN funded more than $3.5 billion in loans. For additional information on REMN, visit www.remn.com .

* RightStart Mortgage, a full service mortgage banking firm and Fannie Mae direct lender specializing in conventional, VA and FHA residential mortgages. Headquartered in Arcadia, Calif., RightStart Mortgage is approved to lend in nine states, including California, Arizona, Colorado, Texas, Montana, New Mexico, Oregon, Wyoming and Washington State. For more information, visit www.rightstartmortgage.com .

* MorganStrause, a full service mortgage banking firm and Fannie Mae and FreddieMac direct lender specializing in conventional, jumbo and FHA residential mortgages. Currently MorganStrause lends in California only and is headquartered in Irvine. For more information, visit www.morganstrausedirect.com .

* CUSO Mortgage, headquartered in Anaheim, California, is a full-service mortgage banking company established in 1986. For more information on states CUSO is licensed in, how to apply to become approved and loan programs they offer, contact Oscar Moran at omoran@cusomortgage.com or 888-400-5000, ext. 4341.

“The renaissance of the wholesale channel is in full swing, and lenders are eager to assuage investor concerns regarding TPO-originated loans,” said Greg Schroeder, president of Comergence. “By investing in sophisticated TPO due diligence and monitoring solutions from Comergence, lenders are confirming their commitment to quality control and above-board lending practices.”

About Comergence:

Comergence Compliance Monitoring, headquartered in Orange, California, is the mortgage industry’s premier end-to-end solution for TPO management and compliance monitoring, providing a comprehensive alternative or supplement to a lender’s in-house management and monitoring resources. Using a variety of best-practice processes, proprietary monitoring technology and hands-on service protocols, Comergence provides lenders unparalleled simplicity, security and quality. For more information about Comergence Compliance Monitoring, visit www.comergencecompliance.com .

News Source: Comergence Compliance Monitoring :: This press release was issued by Send2Press® and is Copyright © 2010 Neotrope® News Network – all rights reserved.

To sign up for the Webinar, contact Lavon Barton at (714) 495-4726.

Initially announced on Oct. 31, 2007, Section 114 of the Fair and Accurate Credit Transactions Act (FACTA) of 2003, also known as the Identity Theft Red Flags and Notices of Address Discrepancy, requires that financial institutions and creditors (explicitly including mortgage lenders and brokers) develop internal programs to detect, prevent and mitigate instances of identity theft. According to the Federal Trade Commission, these programs “must provide for the identification, detection, and response to patterns, practices, or specific activities – known as ‘red flags’ – that could indicate identity theft.”

Originally scheduled for a Nov. 1, 2008 compliance date, the FTC has delayed the enforcement date of the Red Flags Rule three times prior to the final compliance date of June 1.

According to Greg Schroeder, president of Comergence Compliance, the delay in enforcement should not be seen as an indication that compliance will be taken lightly.

“The industry has seen this coming for almost two and a half years, and there is no doubt that compliance enforcement is imminent,” said Schroeder. “Just consider that Fannie Mae included Red Flag Rules compliance in the most recent updates to its ‘Loan Quality Initiative’ guidelines and stated that all lenders and investors that sell directly to Fannie Mae must have procedures in place or face substantial liability.”

“Forget the legal ramifications of non-compliance,” he added. “Based on the RESPA disclosures precedent, GSEs, investors and the like simply aren’t going to do business with you if you don’t have a compliant Red Flag Rules program in place, and it won’t matter whether the FTC was the enforcing authority.”

The Comergence Compliance Webinar will focus on the steps wholesale lenders are required to take to ensure that TPOs meet FACTA’s specific identity protection intent and requirements. Mortgage brokers should sign up for the Webinar to gain a better understanding of how their wholesale lending partners will evaluate TPO preparedness.

About Comergence:

Comergence Compliance Monitoring, headquartered in Orange, California, is the mortgage industry’s first end-to-end, outsource solution for TPO management and compliance monitoring providing a comprehensive alternative to a lender’s in-house management and monitoring resources. Using a variety of best-practice processes, proprietary monitoring technology and hands-on service protocols, Comergence provides lenders unparalleled simplicity, security and quality.

For more information about Comergence Compliance Monitoring, visit www.comergencecompliance.com .

News Source: Comergence Compliance Monitoring :: This press release was issued by Send2Press® and is Copyright © 2010 Neotrope® News Network – all rights reserved.

On p. 20725 of the memo, “Federal Housing Administration: Continuation of FHA Reform; Strengthening Risk Management Through Responsible FHA-Approved Lenders” (http://edocket.access.gpo.gov/2010/pdf/2010-8837.pdf), HUD outlines 10 recommendations for verifying TPO compliance with FHA requirements. The overarching theme within these recommendations is the need for lenders to establish procedures for TPO interaction and activity surveillance. According to Schroeder, these recommendations provide an excellent starting point for lenders to begin developing a sophisticated TPO due diligence strategy, but what is absent from this list is guidance on how to execute these recommendations.

“For these recommendations to truly be effective, the underlying protocols and procedures must be developed with an eye towards standardization across the industry,” said Schroeder. “Comergence Compliance Monitoring has worked to establish processes that would constitute best practices for TPO due diligence.”

In its summary of the changes, HUD noted that some within the industry objected to the change on the grounds that mortgagees would create an undue burden on mortgage bankers (mortgagees), as they would be forced to incur the cost of hiring and training additional staff to process and close loans that would otherwise be managed by their correspondent partners.

In addition, many suggested that the FHA toughen its approval requirements as an alternate means to mitigate risk, rather than eliminate correspondent approvals altogether. According to Schroeder, this strategy fails to place the risk of broker originations with the appropriate party.

“The announcement by HUD is simply a codification of rules that most mortgage bankers were already following implicitly, if not explicitly,” said Schroeder. “This move is a clear flag in the sand by HUD regarding its willingness to interact with the correspondent. It’s the mortgage banker who reaps the benefits of originating through correspondents. Therefore, it should be the mortgage banker, not HUD or FHA, that bears the burden of the risk associated with third-party originations.”

Current HUD regulations already identify several situations, such as suspension or conviction of certain offenses that would prohibit lenders from participation in FHA programs. However, Schroeder warns, there are plenty of other activities in which a broker could be engaged in that would significantly increase the risk a mortgage banker would face in dealing with that broker. If nothing else, he said, HUD’s announcement should serve as a clear indication to mortgage bankers that they must proactively take on the management of TPO risk.

“Comergence Compliance Monitoring has always understood mortgage bankers’ needs for standardization and relationship management with TPO’s,” he continued. “With the technological capabilities that 21st Century innovation affords us, a fully hosted, rules-based automated due diligence solution is now a reality.”

About Comergence:

Comergence Compliance Monitoring, headquartered in Orange, California, is the mortgage industry’s first end-to-end, outsource solution for TPO management and compliance monitoring providing a comprehensive alternative to a lender’s in-house management and monitoring resources. Using a variety of best-practice processes, proprietary monitoring technology and hands-on service protocols, Comergence provides lenders unparalleled simplicity, security and quality.

For more information about Comergence Compliance Monitoring, visit www.comergencecompliance.com .

News Source: Comergence Compliance Monitoring :: This press release was issued by Send2Press® and is Copyright © 2010 Neotrope® News Network – all rights reserved.