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Credit unions can take the worry out of mortgage loan compliance with tools that ensure conformity to any federal, state, and local regulations, according to Mark Dent, president of SELCO Community CU's mortgage lending CUSO, Rainland Mortgage Co.

"The tools operate as an operational safety for the CUSO," Dent said. "Otherwise, in some cases we could be flying blind to local statutes," he said, referring to the ability to sell loans in new areas.

Rainland Mortgage started using ComplianceEase's PredatorAnalyzer and ComplianceAuditor in 2002 after 24 years of manual compliance auditing, Dent said.

Automated compliance may be especially attractive to credit unions as they expand to other geographical areas or offer new loan products in the current mortgage downturn.

"Most credit unions do an excellent job of staying abreast of local statutes," Dent said. "But when a credit union lends to a member outside of its major market, ComplianceEase can help in making a safe loan."

Rainland is a wholly-owned subsidiary of SELCO Community CU, and funded $285-million in conforming and Alt-A transactions across six states in 2003.

"Before ComplianceEase, we were constantly watching statutes, statute changes, and possible statute changes," Dent explained. "And we used Microsoft Excel control sheets to analyze APRs and fees.

"We did a lot more research before, and had to spend a lot more time interpreting statutes," Dent continued.

ComplianceEase products have cut time spent on the compliance process down from one hour to less than 15 minutes per loan, including data entry, he said.

"Now, we input the loan terms into the ComplianceEase Internet-based application and it instantly figures out trigger dates, holiday times and federal tables for indexes," said Dent. "The application does a complete federal, state and local analysis of loan terms in seconds."

In addition to testing loans against statutes, ComplianceEase also checks licensing. "The tool knows if the licensing used in a particular state will allow the terms that are being input for fee caps and fee types, for example."

Even though Rainland doesn't manually check regulatory databases anymore, the 26 year-old company is still on top of the regulatory pulse. "ComplianceEase emails info about statute changes almost every day," Dent said.

Formed in 1978, Rainland serves several other credit unions in addition to banks and mortgage brokers.

San Francisco-based ComplianceEase, a division of LogicEase Solutions, Inc., offers automated compliance solutions driven by artificial intelligence reasoning and decisioning technologies as well as natural language processing.

ComplianceAuditor and PredatorAnalyzer test loans against a knowledgebase and quantitative rule-based decisioning capabilities. The automated compliance system instantly reports incidents of non-compliance.

CUJ Resources

For more info:

* SELCO Community CU at www.selco.org

* Rainland Mortgage Company at www.rainland.com

* ComplianceEase at www.complianceease.com.

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