On May 8, the Federal Reserve Board finalized its early disclosure rules within Regulation Z (Truth-in-Lending Act – TILA) that are set to take effect July 30 and are meant to ensure consumers receive disclosures explaining the cost of a mortgage earlier in the lending process.
Minneapolis-based Wolters Kluwer Financial Services announced on Wednesday that the company’s new Disclosure Manager solution can help financial institutions “quickly and cost-effectively” meet the new early mortgage disclosure requirements. According to Wolters Kluwer, its Disclosure Manager is the first complete solution for automating the entire early disclosure process, in compliance with the Regulation Z requirements.
The company explained that Disclosure Manager’s document preparation platform interfaces with an institution’s existing loan origination system to capture the required disclosure data. The solution then builds Reg Z-compliant document packages and electronically transmits the disclosure documents to borrowers, giving them the option to e-consent or e-sign. According to Wolters Kluwer, this type of delivery speeds up the time to closing and locks borrowers in more quickly. However, if a borrower opts out of electronic delivery or if the institution determines that printed initial disclosure packages are necessary, the documents can be processed by Wolters Kluwer Financial Services’ SAS 70 Type II print and mail fulfillment center.
Jason Marx, VP and general manager of the mortgage division at Wolters Kluwer Financial Services, commented, “Lenders using Disclosure Manager to automate and manage the entire early disclosure process get the best of everything. By removing paper from the process, they save time and eliminate printing, postage, and overnight delivery fees. They can also dramatically reduce the amount of time that sales executives spend on the disclosure process, moving them to revenue-generating activities instead.”

Marx added that by using Disclosure Manager’s secure e-delivery functionality, institutions have a verifiable audit trail that allows them to prove to regulators that disclosures were delivered to borrowers within the timeframes specified by Regulation Z and the Real Estate Settlement Procedures Act (RESPA). And, he said, Disclosure Manager’s e-delivery functionality is more secure than e-mail or other more traditional delivery methods. He explained that the solution leverages Public Key Infrastructure (PKI) encryption to ensure the protection and privacy of customer data in transit and at rest in order to maintain compliance with numerous regulations, including the Gramm-Leach-Bliley and Bank Secrecy acts as well as Federal Financial Institutions Examination Council requirements.
Wolters Kluwer Financial Services also recently announced the launch of the company’s new online RESPA Resource Center , to help lenders find the information they need to meet HUD’s new RESPA requirements, as well as related laws such as TILA, the Home Ownership and Equity Protection Act (HOEPA), and Housing and Economic Recovery Act (HERA), as well as receive alerts when changes or updates are made to the many regulations governing mortgage lending.
Like TILA, RESPA addresses borrower disclosures, and HUD’s new RESPA requirements are intended to help consumers better understand the true cost of their mortgage. Under the new rules, lenders will be required to begin using revised Good Faith Estimates (GFEs), HUD settlement statements, and HUD settlement cost booklets that the regulator believes will more clearly explain loan terms.
Although there has been some controversy regarding the overlap of RESPA and the Fed’s TILA/Regulation Z rules, and the added burden the double regulations could place on mortgage lenders, HUD Secretary Shaun Donovan said in mid-May that HUD is moving forward with the RESPA reform and the mandatory compliance date of January 1, 2010.