ComplianceEase, a provider of automated compliance solutions to the mortgage industry, reports that its flagship platform, ComplianceAnalyzer, is now able to audit Veterans Affairs (VA) loans for unique state charges and fee deviations allowed by the U.S. Department of Veterans Affairs.
Under VA guidelines, lenders are only permitted to charge up to 1% of the loan amount to cover origination, processing and underwriting costs.
Mortgage lenders can handle this one of two ways: charge a flat one percent fee to cover these costs, or itemize fees to take advantage of state deviations/exceptions and charge fees that would otherwise be considered unallowable.
With this enhancement, mortgage lenders that use ComplianceAnalyzer now have the ability to seamlessly test VA loans for allowable state charges and fees that are typically considered unallowable under VA guidelines, ensuring they are compliant when itemizing charges and fees.
“More than 30 states allow lenders to charge certain fees that would otherwise be included in the one percent cap for VA loans. Itemizing these fees can be challenging and, if done incorrectly, lead to compliance violations and reputational risk,” says Sanjay Tibrewal, senior vice president of product management at ComplianceEase, in a release. “In fact, several lenders are currently under investigation for overcharging veterans for mortgage loans. 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.”