Come Aug. 1, manual data entry to collect property-related data could cause headaches for lenders when the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures (TRID) regulation takes effect.
An automated data extraction service, eLynx, says its new service may prevent those lender headaches when collecting data from settlement service providers.
Part of the CFPB’s “Know Before You Owe” initiative, TRID consolidates four existing disclosures required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) into two forms: a Loan Estimate that must be delivered or placed in the mail no later than the third business day after receiving the consumer’s application, and a Closing Disclosure that must be provided to the consumer at least three business days prior to consummation of the mortgage transaction.
Technology provider eLynx said its service will enable settlement service providers (SSPs) to upload property and fee information in document form. From there, eLynx will extract the data to be used in TRID’s required Closing Disclosure form, eliminating the need for lenders to re-enter data from their settlement service providers’ documents.
“They can completely bypass the part of their workflow that presents the highest risk for error,” said eLynx President and CEO Sharon Matthews.
According to a recent eLynx survey, only 6 percent of its users currently have a fully automated process for collecting property data from settlement service providers. The rest will rely on manual data entry for at least some of their transactions.
Automating data entry typically requires a direct integration between the title production system and the system creating the Closing Disclosure. Several vendors, including eLynx and its partners, either currently have or are planning integrations with the major title production systems.
But most lenders work with many different settlement service providers and will not have an automated solution for every settlement services provider. These lenders must rely on manual data entry, a process prone to error and risk, says eLynx.
When settlement agents generate a Closing Disclosure form in PDF format, eLynx will generate the data and transfer it to the eLynx Electronic Closing Network, or eCN. Lenders can then combine the data with loan-specific information from their loan origination systems, compare it to previous disclosures and create the Closing Disclosure.
ELynx, a portfolio company of American Capital Ltd., headquartered in Cincinnati, Ohio, helps customers in the financial services and real estate industries capture and manage documents and associated data electronically throughout the loan document life cycle. ECN is used by more than 85,000 closing professionals.