Ellie Mae Total Quality Loan Program Now Offers Buy-Back Insurance Option
07 Mayo 2012 - 8:00AM
Business Wire
Ellie Mae® (NYSE Amex:ELLI), a leading provider of enterprise
level, on-demand automated solutions for the residential mortgage
industry, today announced that it is adding a loan buy-back
insurance option to its Total Quality Loan™ (TQL) program.
TQL is an initiative designed to further enhance the loan
quality, compliance and salability of loans that are originated
through Ellie Mae’s Encompass360® mortgage management software
system. TQL offers a suite of fraud detection, valuation,
validation and risk analysis services, tailored to individual
aggregator/investor requirements. Ellie Mae’s secure, tamper-proof
technology enables correspondent lenders to share the findings and
data from those services with investors and other stakeholders in
the industry supply chain.
Correspondent lenders participating in TQL can now choose to
insure and be covered for losses of up to $100,000 per loan.
Underwritten by affiliates of Lloyd’s of London and Liberty Mutual
Group, the insurance policy protects lenders from losses due to
borrower and appraisal fraud and regulatory non-compliance. For
example, the policy covers a seller against claims based on
misstatement of income or assets, employment and occupancy fraud,
as well as collateral and valuation fraud. Similarly, it protects
against loss if a loan is found to be non-compliant with various
regulations, such as Federal Truth in Lending Act Tolerance Tests
(HOEPA); Federal, State and Local High Cost Thresholds Review;
Fannie Mae Points & Fees, and “HUD-HOEPA” Mortgage Thresholds
Reviews.
The coverage begins at the date of origination and lasts for
three years. The policy’s coverage automatically transfers with
ownership of the loan so that any party who owns the loan at the
time a fraud or compliance error is discovered may file a claim
under the policy directly rather than force the loss back to the
original lender. While there is a modest cost to the lender for
this coverage, this can be offset by lower loan reserves that are
available to lenders with insured loans. Ellie Mae receives an
administrative fee for each closed loan covered under a policy.
The program is designed to offer enhancements to traditional
programs available in the marketplace. If a fraud or compliance
error is discovered, the party suffering a loss can file a proof of
loss and determine whether or not it is covered before the amount
of the loss has been determined. This allows efficient repurchase,
scratch and dent sale or foreclosure options to be assessed with
the knowledge that coverage exists. Often, insurance providers’
practices have prevented policyholders from learning whether or not
coverage exists until other options for recourse have been
completed (or lapsed).
Arthur J. Gallagher Risk Management Services, Inc., a subsidiary
of Arthur J. Gallagher & Co. (NYSE: AJG), one of the world’s
largest insurance brokerage and risk management services firms, is
the broker for the program. Justin Vedder, area senior vice
president at Arthur J. Gallagher Risk Management Services in San
Francisco explained, “This program is a validation of Ellie Mae’s
TQL process. TQL customers adhere to rigorous origination standards
and follow best practices and as a result automatically qualify for
this exceptional coverage.”
“Over the past several years, the GSEs and investors have put
back approximately one hundred billion dollars worth of loans to
originators,” said Richard Roof, Ellie Mae’s senior vice president
of Business Development. “Our TQL program is a direct response to
the industry’s demand for increased quality assurance. It is
designed to give investors and sellers greater confidence in the
assets that are being originated. Adding optional buy-back
protection is simply a cost-effective extension of this concept and
further mitigates risk.”
About Ellie Mae
Ellie Mae, Inc. is a leading provider of on-demand automation
solutions for the mortgage industry. The Company offers an
end-to-end solution, delivered using a Software-as-a-Service
model that serves as the core operating system for mortgage
originators and spans customer relationship management, loan
origination, and business management. The Company also hosts the
Ellie Mae Network™ that allows mortgage professionals to conduct
electronic business transactions with the lenders and settlement
service providers they work with, to process and fund loans. The
company's offerings include the Encompass®, Encompass360® and
DataTrac® mortgage management software systems.
Ellie Mae was founded in 1997 and is based in Pleasanton,
California. To learn more about Ellie Mae, visit www.EllieMae.com
or call 877.355.4362.
© 2012 Ellie Mae, Inc. Ellie Mae®, Encompass®, Encompass360®,
DataTrac®, Ellie Mae Network™, Ellie Mae Total Quality Loan™
Program and the Ellie Mae logo are registered trademarks or
trademarks of Ellie Mae, Inc. or its subsidiaries. All rights
reserved. Other company and product names may be trademarks or
copyrights of their respective owners.
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