NTC defines a fully compliant process. In fast-changing regulatory environment, compliance for lien releases hasn’t changed.
NTC has completed a legal review of the industry’s standard lien release process in order to confirm best practices for regulatory and investor compliance. The results, according to the company, indicate that there are a significant number of items that must be absolutely right in order to create a legal and compliant lien release process.
“Regulatory compliance is a top concern in our industry, but many are focused on new rules, such as the CFPB’s TILA/RESPA Integrated Disclosure (TRID) rule and not paying enough attention to processes that are often taken for granted,” said NTC CEO John Hillman. “The regulatory changes that the industry has seen over the past few years have had a definite impact on the lien release process. Companies that don’t keep pace with these changes face significant compliance risk.”
So what does it take for a vendor to demonstrate full compliance? In its review, NTC found that full compliance is not possible unless the vendor can demonstrate the following, at a minimum:
- a commitment to well-developed and internally audited document signing controls
- knowledge and careful tracking of jurisdiction requirements
- the ability to enter documents into the public record electronically
- the ability to deploy a well-trained document research team
- a demonstrated expertise with least-cost research exception resolution
- a process for aggressive recorded document follow up
- a complete understanding of trustee state solutions
- well developed capacity and overflow models
- a complete set of business recovery solutions
- a compliant UPL solution
- and a rigorous internal SLA methodology
NTC’s internal clients studies have shown that when these elements are all present, a lien release vendor can demonstrate above 99.8% statute compliance on a regular basis. NTC has achieved this and is prepared to document this for its clients and prospects.
“Regulatory and investor changes have impacted every part of the home finance industry and lien releases are no exception,” Hillman said. “Problems here can be very serious for the mortgage loan servicer and the investor. Settling for a vendor that does not take compliance seriously will expose the buyer to compliance risks that lead to financial loss.”
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