May 4, 2018
Today we met with our MERS ICE conversion specialist to test eRAMP’s XML Online Registration and SFTP Batch processing connectivity. Communication testing was successful. The current production version all eRAMP users are using was able to login to both XML Online Registration and SFTP Batch processing. The only changes to eRAMP that are required is to update the SFTP IP address and username on the Client setting screen. The only eRAMP change required for XML Online Registration to work is to change the URL. Both XML and SFTP will required a new password to log into MERS system once the ICE conversion is ready for transaction testing.
The second step in testing was to submit a file to XML Online registration and SFTP Batch processing. XML was unsuccessful do to a configuration issue in Cyberlink’s user profile. ICE will research the error and make the necessary changes to Cyberlink’s profile so we can re-test next week. SFTP processing was successful submitting a transaction file and receiving confirmation.
What’s next; as soon as ICE confirms the profile correction to Cyberlink’s profile we will retest submitting a file through the XML Online Registration system. Next step testing for SFTP is to confirm eRAMP receives the consolidated transaction report for transaction reconciliation. Timing to complete testing for the next two tests will be based on ICE’s test schedule. We will let our users know the results as soon as the test have been completed.
Our key concerns were if eRAMP would be able to connect using the new ICE communications setup and if not, what programming changes would be required. Our technicians felt there would be no programming changes required to make the initial connection and today’s tests confirmed they were correct.
Please visit eRAMP Client Resource Center for MERS ICE conversion updates. If you have questions please submit a ticket through our support center at https://www.oncyberlink.com/client-resource/
eRAMP Support Team
HMDA is a big deal for the lending industry. Since 1975, this federal regulation has required institutions to report their data to supervisory agencies on a loan-by-loan or application-by-application basis. The Federal Financial Institutions Examination Council (FFIEC) then uses this data to create individual disclosure statements for each institution as well as aggregate reports that provide insights into the mortgage industry as a whole. These reports can be obtained by the public, making them an important part of the government’s efforts to increase transparency in the industry.
At Cyberlink, we’ve noticed that lenders tend to fall into two camps when it comes to HMDA (or Hum-duh) compliance. For some lenders, adhering to this regulation is kind of a no brainer. It may not be fun, but routine preparation and established processes make things pretty easy. For the other group, which we sometimes call the Hum-Doh’s (think Homer Simpson) things aren’t so easy. That’s because these lenders typically don’t do much preparation, causing them to sweat deadlines and even miss important things. They swear they’ll change, but these problems repeat year after year.
The good news for the Hum-Doh lenders is that change is possible. In fact, we’ve made HMDA compliance a whole lot easier for many clients. We keep up to date with all the latest regulatory requirements as well as all the best practices for the industry. Did you know that:
- There are 110 data fields required for 2018 reporting – this is 42 new or modified fields more than last year!
- There are 2 scenarios for HMDA reporting provided by the Consumer Financial Protection Bureau (CFPB) – Single Family closed end purchase and Open Ended lines of credit. These 2 scenarios have received 23 updates since July 2017!
- Beginning with January 1, 2018 the CFPB made Government Monitoring Information (GMI) and denial reasons for Home Equity Lines of Credit (HELOC) a mandatory data collection. Reporting of this loan program has previously been optional.
- HMDA is essentially a Fair Lending review. With new rules, the CFPB will be receiving fair lending information from more than 7,400 lenders in an automated fashion, thereby allowing regulators a streamlined opportunity to analyze your practices
During our onsite visits, we have seen a lot of different issues. Some lenders struggle with manual spreadsheets to collect HMDA data. Others are doing their best with their LOS but are scrambling at the end of the year to fill in the missing data only to miss a component. Unfortunately, these errors can result in receiving regulators ongoing attention. If you need help with HMDA reporting, reconciliation, procedures , processes or drafting a Fair Lending Policy, call us! If you are a LendingQB customer call us to learn about our HMDA tips and tricks.
We’ve had a lot of really good questions from our eRAMP users regarding migrating eRAMP to MERS new ICE data center. Now, thanks to outstanding communications from our partners at ICE we have something tangible to report to our users.
Based on a webinar earlier this week and documentation provided by MERS we have great news. We believe eRAMP will require no program changes to communicate and submit cases to MERS after the migration. The only change to be made in eRAMP will be users will have to update the SFTP IP address on eRAMP’s Client screen. For eRAMP users using MERS Online Registration option no changes will be required. Pretty easy, right?
To make sure eRAMP has an open path to get to MERS ICE data centers users may have to have their IT department whitelist MERS new IP addresses. For more information about IP addresses please visit MERS member’s area of their website and download MERS ICE Migration Info Sheet. If users have not already downloaded MERS ICE Migration Info Sheet we recommend they do this right away. From the member’s area of MERS website in the lower right corner of the page there are several download options. Click the option to download the Migration info sheet. Users will find 10 pages of very valuable information to help them understand the process MERS is taking to complete their migration to ICE data centers.
Here’s a copy of the process overview from the migration info sheet that we will be following:
- a) Phase 1 – February-March 2018 – Technical Migration Information provided to Members
- b) Phase 2 – March-July 1, 2018 – Members begin the setup process to ensure that their organizations are able to connect and to test connections to ICE data centers.
- c) Phase 3 – Switch over weekend in 3Q 2018
- d) Phase 4 – MERS Systems live at ICE data centers in 3Q 2018
While testing is just starting we had good success on our first test. We were able to establish basic communication with MERS Online. The first test went well and was completed on the first try. Additional testing is underway and should be completed well before ICE’s completion date of July 1, 2018.
As we move through testing milestones we will email updates. Please visit our Client Resource Center to get all the latest news about MER ICE migration and other Cyberlink news.
Cyberlink Support Team
MERS members should visit MERS website for more information
According to statistics compiled by the Urban Institute Housing Finance Policy Center and Mortgage Daily, loans backed by the FHA and VA accounted for nearly one in four mortgages opened in 2016, making up nearly half a trillion dollars in issued loans. Before the financial crisis in 2008, these loans made up less than a third of the total market. The explosive growth in this sector is likely to continue uninterrupted. We’re here to help you take advantage of this huge pool of potential borrowers.
The only way a lender can offer an FHA loan is to get official approval from the FHA. This process includes an online application and attachment of relevant documents, including state license or registration, financial reports, quality control plans, and proof of errors and omissions insurance. Compliance through the Initial Certification Statements will also need to be confirmed. There are currently four different types of application programs available:
- Nonsupervised Mortgagee – For institutions who want to originate, underwrite, close, endorse, service, purchase, hold, or sell FHA-insured Mortgages.
- Supervised Mortgagee – For credit unions and banks who want to be involved in all the above aspects of FHA-insured loans.
- Government Mortgagee – For local, state, or federal entities who wish to offer FHA-backed loans.
- Investing Mortgagee – For investing firms who want to purchase, hold, or sell FHA-insured Mortgages.
At Cyberlink Software Solution, we specialize in assisting organizations looking for both nonsupervised and supervised mortgagee applications. We can answer any questions you have about the approval process while providing detailed assistance during each phase.
Step-by-Step Support and Assistance
Like any other type of government application process, getting FHA approval as a lender can be a long, confusing, and even frustrating process. We’re expert consultants who’ve seen it all, and we stay up to date on all the amendments to FHA policies and procedures. We’ll work closely with you to develop a strategy that reduces processing time and minimizes any hassle on your part. Our mission is to eliminate red tape whenever possible and get you servicing FHA-loans for your customers.
Cyberlink is proud to announce that Jennifer Sherwin has been hired as the new Sales and Marketing Coordinator. Sherwin is responsible for partnership launches, standardization of business presentations, development of marketing campaigns, and sales team support. Her ability to optimize strengths and improve weaknesses is expected to transform Cyberlink’s ability to meet and exceed customer expectations.
Greg Uttal, President at Cyberlink Software, states “We needed a better bridge connecting our software development, customer support, sales and consulting groups to help us streamline communications and improve our efficiency. With Jennifer’s communications, marketing and data management skills we found our bridge. Jennifer fills an important role to help our organization improve internal and external communications and expansion goals.”
Sherwin comes to Cyberlink Software after serving as the Regional Communications Director and Marketing and Sales Coordinator at USI Insurance Services. It’s there that she earned experience developing and creating all types of communications materials and managing the entire marketing department. She is a proud graduate of California State University Northridge.
Jennifer Sherwin’s accomplished a lot in a relatively short amount of time. Some of the highlights of her career in the industry include winning the Summit Award in 2013 for “Best in Class” job performance and improving the conversion ratio at USI through enhanced CRM usage and standardization. Her ability to optimize communications is very likely to increase productivity and customer experiences at Cyberlink Software going forward.
The March 1st deadline for HMDA reporting has come and gone, and that means now is the time to start preparing for National Credit Union Administration examination. As you may or may not know, the NCUA started an extended exam cycle last year, and they expect full implementation by the end of 2018. Preparing for all the auditing requirements going forward may seem a bit confusing, but we’re here to help.
During examinations this year, the NCUA will be focusing on several topic areas which were outlined in Letter No. 17-CU-09 to Federally Insured Credit Unions. Supervisory efforts will concentrate on areas of highest risk, new products and services, and compliance with Federal regulations.
Compliance with Bank Secrecy Act
One of the biggest priorities for the NCUA is to make sure there are safeguards in the Credit Union system against criminal activity such as money laundering and funding of criminals/terrorists. They act on this priority by performing examinations and filling out questionnaires in compliance with the Bank Secrecy Act. Examiners are required to “identify the CU’s BSA/AML risks, develop the examination scope, and document the plan.” Compliance assessment will begin in the second half of this year.
Interest Rate and Liquidity Risk
Not all credit unions were examined for interest rate risk in 2017, but new procedures mean many will be examined for the first time in 2018 according to NCUA letter 16-CU-08. This is due to the significant growth in complexity and size of credit unions. In only 10 years, the total assets of credit unions has tripled, larger institutions have formed from consolidations, and the amount of unions with more than a billion in assets has grown by more than 500%. New regulations, which have been updated for the first time in 10 years, are designed to mitigate risk.
Member Business Loans/Commercial Lending
On January 1st of last year, a new rule for member business loans and commercial lending was implemented. The stated objective of this new rule was to “reflect a principles-based approach to regulation…designed to provide greater flexibility to credit unions to meet the needs of their members.” Credit Union officials should be prepared this year to provide documentation that supports their management’s ability to effectively monitor and manage the institution’s commercial loan portfolio. Examiners will focus on whether or not policies, procedures, and staffing are appropriate for the type of commercial loans offered.
Internal Controls and Fraud Prevention
Risk of fraud continues to be a major concern for federal regulators. Credit Unions are responsible for ensuring that their member’s financial data is secure, and examiners evaluate this ability by checking internal controls. They also assist in efforts to prevent and detect fraud. According to the NCUA, “Under the Federal Credit Union Act, promoting financial literacy is a core credit union mission.” This also means credit unions need to give their members the tools and information needed to keep their identities safe, so examiners will be checking to ensure financial literacy programs are in place.
Credit Unions that have material exposure to higher risk forms of auto lending will get some extra scrutiny during evaluations this year. That’s because, according to the NCUA, these credit unions are particularly vulnerable to losses that may affect the entire institution’s financial health. Specifically, examiners will focus on portfolios with the following elements:
1. Extended loan maturities of over 7 years
2. High loan-to- values
3. Near prime or sub-prime
4. Indirect Lending programs
Loan/Application Registers (LAR)
Beginning in the second quarter of this year, examiners will perform limited reviews of quarterly Loan/Application Registers (LAR), when applicable, in order to evaluate Credit Union good faith to comply with recent amendments to the Home Mortgage Disclosure Act. Due to the new implementations of the law, NCUA examiners will be more flexible with credit unions, and their actions will be more diagnostic in nature. They will be helping institutions find gaps in their implementations of amendments to Regulation C and recommending areas for improvement.
Preparing for Examination
As we all know, the best way to have a “clean” and hassle-free audit is to be prepared and have your best efforts well documented. Board approvals, policies, procedures and the due diligence you have done on the risk and reward of all new products should be clearly written and easily accessible. According to the NCUA supervision manual, ” examiners are responsible for supervising assigned credit unions through conducting ongoing, results-oriented examinations and supervision contacts and communicating with officials and management.” Making things easy for examiners will result in faster clearance and fewer complications
The highly knowledgeable and experienced consultants at Cyberlink would love to assist you in preparation for this year’s changes. We can work with you on documentation, streamlining of processes, or help with the implementation of new products or services. Please reach out to us with any requests for assistance or questions you may have.