The enhancement aims to prevent overcharging veterans for mortgages
ComplianceEase has announced that it now audits Veterans Affairs (VA) loans through its ComplianceAnalyzer platform.
VA guidelines keep lenders from charging 1% of the loan amount to cover origination, processing, and underwriting expenses. Lenders can either require a 1% fee to pay for costs or itemize fees through state deviations and exceptions and then impose fees, which is prohibited.
“More than 30 states allow lenders to charge certain fees that would otherwise be included in the 1% cap for VA loans. Itemizing these fees can be challenging and, if done incorrectly, lead to compliance violations and reputational risk. In fact, several lenders are currently under investigation for overcharging veterans for mortgage loans,” said Sanjay Tibrewal, senior vice president of product management at ComplianceEase.
The company said that ComplianceAnalyzer would allow the auditing of VA loans for Department of Veterans Affair-permitted state charges and fee deviations. This means lenders can test VA loans for permissible state charges and fees that are usually restricted under the VA guidelines to ensure compliance.
“Our enhancements to ComplianceAnalyzer allow lenders to not only itemize fees for VA loans to take advantage of allowable state exceptions but also mitigate risk by ensuring compliance and quality control,” Tibrewal said.
