Ernst Platform Helps Settlement Agents Provide Accurate Fees for Loan Estimate

March 1, 2016

When the TILA-RESPA Integrated Disclosure (TRID) rule advanced by the Consumer Financial Protection Bureau (CFPB) went into effect last October, many worried that compliance concerns would force larger lenders to suspend activity with smaller settlement agents and title companies. According to Ernst Publishing Company, a provider of technology and closing cost data for the real estate and home finance industries for the past 26 years, that crisis was averted by technology.

"Having the nation's largest lenders boycott smaller firms over the fear that they would not be able to comply with TRID was a very real threat last year and could have changed the entire landscape of the lending business," said Gregory Teal, president and chief executive officer of Ernst Publishing. "We've been working with many of these companies for over 26 years and there was no way we were going to allow that to happen."

Ernst's answer was its Settlement Agent Gateway, a collaborative fee management system the company launched last spring. The technology allows settlement agents to work with lenders to negotiate fees and then manage these fees in a web-based tool. Ernst says the system lets settlement agents certify the accuracy of their fees and then make them available to lenders for the Loan Estimate. According to Ernst, “this ensures full TRID compliance, protects the lenders from having to re-disclose later for quoting the wrong fees and protects smaller settlement agent firms from being pushed out of the market due to non-compliance concerns.”

 The technology uses MISMO data standards to allow the settlement agent to enter pre-negotiated fees into a spreadsheet that includes cells for the required services by geography, and then certify that the fees are accurate. Ernst then loads this fee information into the lender's custom fee engine. When the company is ready to create a new TRID Loan Estimate, the fees for their settlement agent partners will automatically be loaded into the disclosures.

Teal pointed out that Ernst's Gateway is not a closing portal.

"Fees must be disclosed accurately to borrowers long before they get to the closing table,” he said. “Both lenders and settlement agents needed a tool that will allow fees to be negotiated far in advance of the closing and then locked into the lender's closing-cost search engines."

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