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3 Reasons You Must Adopt AI-Based Quality Engineering

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Regulations are constantly changing in the mortgage industry. Lenders are under continuous pressure to meet fast approaching deadlines on UCD and HMDA.

The Uniform Closing Dataset (UCD) is a standard industry dataset enabling information on the CFPB’s Closing Disclosure to be communicated electronically. The first deadline of 25 September 2017 mandates lenders to deliver borrower data and Closing Disclosure in the UCD file. UCD improves loan quality through increased data accuracy and consistency. This is of interest to the GSEs as it enhances the loan’s eligibility for sale in secondary markets.

The year 2018 brings updates to the HMDA. The new HMDA rule requires over 48 data points to be collected, recorded and reported. This includes multiple new data points and a few modified from the previous rule. New fields include credit scores, CLTV ratio, DTI ratio, detailed demographic data etc. The CFPB asserts that the changes improve the quality and type of data reported by financial institutions leading to greater transparency.

The updated regulations bring a new set of challenges to lenders. Investments in technology systems and processes can potentially increase the ever-rising loan origination cost. Data privacy and security is another concern. With the increased number of data fields, protecting sensitive borrower information is a priority. Additional data can also be used in fair lending claims thereby increasing litigations risks and costs.

Since 2008, the mortgage industry has been taking giant strides in improving data reporting and compliance standards. TRID rule impacted the industry at almost every point along the transaction, and UCD/ HMDA will change the way data is collected, recorded, reported and delivered.

Over the years, Tavant’s mortgage expertise has helped lenders implement regulatory changes with cutting edge technologies. In 2015, we helped multiple lenders achieve TRID compliance ahead of schedule. In 2017, we are doing the same with HMDA and UCD. It’s time to achieve Accelerated Compliance with Tavant Testing. The countdown is on!

To learn more about our testing solution please visit: UCD/HMDA Compliance Testing by Tavant

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