ComplianceEase, a provider of automated compliance solutions to the financial services industry, announced this week that it is now offering a warranty program for loans that are found to have compliance defects.
The program, called AssureCert, is a comprehensive insurance-backed warranty program for loans that have been audited by ComplianceEase’s ComplianceAnalyzersolution, the company said in a release.
The new program provide lenders with a warranty for compliance defects, including the new TILA-RESPA Integrated Disclosure and Qualified Mortgage rules as well as federal and state consumer lending and high-cost laws and regulations, ComplianceEase said.
ComplianceEase also said that this program may be used as compliance repurchase relief for secondary market transactions.
According to the company, the program provides a maximum benefit of up to $50,000 per loan for a seven-year period, and is backed by an A.M. Best A-rated insurer.
Under the new policy, there is no per claim minimum or deductible, and the warranty is transferable to secondary market investors or servicers, the company said.
According to ComplianceEase, the new program is available for first and second liens; purchase, refinance and equity transactions; conventional, FHA and VA loans; and all property types. The warranty also does not require minimum credit scores or place limits on loan-to-value.
“AssureCert provides protection to lenders and investors for financial losses from fines, penalties, restitutions, judgments, defense costs and reasonable plaintiff's attorney fees from actions brought against the financial institution for specific regulatory compliance violations that are not reflected on the ComplianceAnalyzer report for a covered loan,” the company said in a release.
As an example, AssureCert will cover losses that can still occur when a regulator or court unexpectedly contradicts a widely held regulatory interpretation, the company said.
Additionally, AssureCert expands the scope of coverage beyond typical warranties, as it can also be transferred to the purchaser when a loan changes hands in the secondary market.
“The new QM and TRID rules have exposed lenders and investors to civil lawsuits, as well as fines and repurchase risk,” said John Vong, president of ComplianceEase.
“Our insurance-backed AssureCert warranty will offer our clients—both large and small—additional protection and peace of mind,” Vong said. “Over time AssureCert may also come to be used in the secondary market as a credit enhancement for structure transactions. Finally, the amount and scope of the coverage further attests to the reliability of the complete suite of ComplianceEase’s solutions.”
