The following post is provided by Asurity, a MeridianLink® Marketplace partner.
A compliance issue found while a processor is still working on a loan may require only a missing data point or a corrected disclosure. If that same issue surfaces at a later stage, the file may need to be reopened, reviewed again, and sent back through steps the processing team believed were completed.
This challenge is compounded by the growing variety of mortgage products emerging in the market, including debt service coverage ratio (DSCR) loans and home equity loans. These specialized offerings involve unique eligibility requirements, disclosures, fee structures, and state and federal compliance obligations. In home equity lending, where state-specific disclosures, right of rescission rules, and exact fee caps must align with loan data, generating accurate document packages depends entirely on clean data from the start. As loan products become more specialized and workflows more complex, lenders need compliance controls that identify potential issues as early as possible, when they are still relatively easy and inexpensive to correct.
Identifying issues sooner also makes it easier to address them. Yet today compliance testing often still occurs outside the processor’s regular workflow. The processor submits the loan, waits for results, and then must return to a file that may already have moved forward. That back-and-forth adds work, delays document preparation, and slows the process.
Giving processors access to compliance results while they are working on the loan allows them to respond before missing information or potential exceptions move further downstream.
Relevant results matter
Mortgage compliance requirements vary based on the transaction, jurisdiction, investor, and loan program. If a platform runs every available test against each file, compliance teams can end up sorting through findings that have little or no bearing on the loan being reviewed.
RegCheck®, Asurity’s mortgage compliance platform, uses loan data to determine which tests apply based on the transaction, investor, and loan program. Its coverage spans federal, state, local, and investor requirements, with testing across areas such as TRID, QM, NMLS, flood, and OFAC, as well as specialized loan types and jurisdiction-specific requirements, including Texas Home Equity. When paired with Propel™, Asurity’s dynamic document generation platform, validated data instantly drives accurate, compliant loan packages, whether generating complex home equity loan disclosures or standard mortgage loans.
Lenders can also configure their own testing and overlays. This gives institutions a way to account for lending policies and investor requirements without asking employees to interpret the same broad set of test results for every loan.
The results also must reach the people who can act on them. For an integration to be useful, processors should be able to initiate a check from a familiar system, receive findings specific to the loan, and see those findings early enough to make a correction.
The role of standardized data
Reliable compliance testing depends on reliable loan data. Every time information has to be entered again or manually transferred between systems, the lender creates more work and another opportunity for a mistake.
Common data standards make it easier for origination and compliance platforms to exchange that information consistently. RegCheck is built on MISMO® standards and supports the latest Mortgage Compliance Dataset (MCD). Asurity® was the first compliance technology provider to support both the import and export of Mortgage Compliance Dataset files.
RegCheck’s API architecture also supports connections with loan origination platforms, including MeridianLink® Mortgage Access. The integration allows lenders to seamlessly bring compliance testing into a system their employees already use and receive results as part of the loan origination process.
That connection alone does not make a workflow effective. Lenders still need to consider whether the platform selects the appropriate tests, accommodates their own policies, clearly explains what needs attention, and maintains results for future review. Those details determine whether the technology eliminates work or creates another system for the team to manage.
What earlier visibility looks like at LAFCU
Los Angeles Federal Credit Union (LAFCU) experienced this issue firsthand. The credit union did not have enough visibility into compliance concerns during processing. Its third-party provider reviewed 10% of its loans, and completed files were not always returned quickly.
After implementing RegCheck, LAFCU’s processors began using the platform daily within their MeridianLink Mortgage Access environment. They can run checks on all loans in production and review reports for missing information, including items related to TRID and RESPA, while the loan is still in progress.
“We wanted something that would tell us while we were in the process if we were missing anything,” said Taylar Long, AVP of Real Estate Lending at Los Angeles Federal Credit Union.
For LAFCU, the benefit is straightforward: processors can spot missing information while they are already in the file and address it before the loan moves on. The credit union also reports that RegCheck has helped its team move faster during processing.
Compliance testing provides the greatest operational value when the results arrive in time to influence the work. By connecting origination, compliance, and document technology, lenders can give their teams useful information at the point when a correction is easiest to make, ensuring every loan package, from home equity products to complex mortgages, moves forward without delay.
Explore how RegCheck helps lenders incorporate mortgage compliance testing into the workflow.
The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the mortgage compliance content herein. The opinions expressed in this article are the opinions of the individual authors and may not reflect the opinions of MeridianLink, Inc.
