ComplianceEase Announces Technology Solutions to Add Greater Protection to U.S. Residential Mortgage-Backed Securities Due Diligence - ComplianceAnalyzer LIFT will provide rated structured finance transactions with enhanced monetary protection through loan-level compliance warranty -
Las Vegas, NV - February 9, 2009
- ComplianceEase®, the nation's leading provider of risk management solutions for the residential mortgage industry, announced at the American
Securitization Forum's ASF 2009 Conference a new regulatory compliance risk mitigation solution called ComplianceAnalyzer® LIFT
(Legal Integrity for Financial Transactions), which meets the new compliance due diligence criteria announced by the various credit rating
agencies in late 2008. Furthermore, this next-generation compliance risk mitigation solution is now available through all major firms that
conduct independent third-party due diligence on residential mortgage-backed securities (RMBS) transactions.
Recent announcements from credit rating agencies, including Moody's Investors Service, Standard and Poor's, and Fitch Ratings, introduced new
requirements for due diligence performed on rated U.S. residential mortgage-backed securities transactions. The new rating agency requirements
are, in large part, a response to due diligence reforms stipulated in agreements between the nation?s principal credit rating agencies and the
Attorney General of the State of New York in June of 2008. ComplianceEase's compliance risk mitigation solution meets and exceeds the new rating
standards, enabling the industry to immediately implement the required level of compliance due diligence. The new due diligence requirements for
rated transactions detail the need for loan-level regulatory compliance audits that cover all applicable Federal, state and municipal mortgage
lending laws and regulations. They also set forth minimum standards for maintenance of compliance technology that is employed as part of implementing
that loan-level due diligence review.
Under the new standards, compliance due diligence on rated RMBS transactions must be monitored by competent legal staff. Specifically, an independent
legal opinion letter must certify that periodic reviews have been performed on the compliance technology and audit criteria that are used by due
diligence firms. ComplianceAnalyzer is already the mortgage industry's compliance solution of choice, widely used by industry participants and
regulators alike. From its initial release more than seven years ago, ComplianceAnalyzer has been continuously updated with the latest mortgage
laws and regulations and developed and reviewed by numerous internal and external expert legal counsel. ComplianceAnalyzer LIFT is powered by
enhanced core compliance audit technology that meets additional certifications required by the new rating agency requirements. It also includes
the exclusive investor-transferable loan-level insurance-backed AssureCert® warranty, making the solution the industry's only complete compliance
risk mitigation solution designed for a new era of due diligence requirements.
"There are literally hundreds of lending laws in effect across the nation today. The associated penalties and costs to cure for non-compliance
are very costly, especially when the loans are part of structured finance transactions," said Mark Hughes, vice president of due diligence solutions
at First American CoreLogic. "ComplianceAnalyzer provides us with real-time access to loan-level compliance auditing and risk analysis across all
Federal, state, and municipal consumer credit and high-cost laws and lending regulations," added Hughes.
With the secondary mortgage market now mostly frozen due to uncertainty and a perceived lack of transparency, quantifying and mitigating areas of
regulatory compliance risk are among the top priorities for mortgage lenders, bond issuers, and investors. Moreover, constantly changing provisions
in mortgage lending legislation have forced the Capital Markets to turn to independent, third-party technology to implement compliance due diligence.
Its pervasive adoption among due diligence providers has shown that ComplianceAnalyzer LIFT is one of the most effective ways to address the regulatory
risks faced by the industry. This unique solution is poised to play a key role in helping to restore the mortgage market's credibility.
Leading third party due diligence firms leveraging ComplianceAnalyzer LIFT as part of their independent audit services include:
ADFITECH
Allonhill
BSI Financial Services
CrossCheck Compliance
Digital Risk
EdgeMAC
First American CoreLogic
FISERV Portfolio Services
Franklin Credit Management Corporation
Global Finance Review
Interactive Asset Services (IAS)
"ComplianceAnalyzer LIFT has been pivotal for us to meet the rating agencies' evolving regulatory criteria and, as a result,
provide superior service to our clients," said Sue Allon, founder and chief executive officer of Allonhill, a mortgage due
diligence company. "This comprehensive auditing system streamlines the compliance process, saving our clients time and money
in avoiding potentially costly issues with non-compliant assets."
ComplianceAnalyzer LIFT goes beyond the minimum requirements for compliance due diligence on rated transactions by also providing
monetary protection against regulatory compliance losses from $25,000 to $250,000 per loan. The offering's insurance-backed warranty,
AssureCert, covers losses associated with fines, settlements, refunds, and related costs resulting from loan-level compliance deficiencies.
Monetary coverage extends to all regulatory tests in the scope of the ComplianceAnalyzer LIFT audit certificate, including all Federal,
state, and municipal high cost and anti-predatory lending regulations, Federal Truth-in-Lending requirements, and state consumer
credit laws and regulations. The solution greatly expands upon traditional representations and warranties, adding to the scope of
consequences that investors can protect themselves against, including monetary risks from rescission, examiner fines and penalties,
costs to cure defects, and litigation expenses. AssureCert also covers losses from compliance violations that affect secondary market
transactions, which can result in costly loan repurchases. The unique warranty even addresses the potential for differences in
interpretations of laws and regulations that are covered by ComplianceAnalyzer LIFT. Warranty protection can be transferred to investors,
and claims can be made up to five years after issuance of audit certificates. AssureCert is available exclusively from ComplianceEase
and is underwritten by leading stable insurers that do not issue mortgage insurance and are rated "A-" or higher by A.M. Best.
Jason Roth, senior vice president of product development at ComplianceEase explained, "Although the markets are experiencing great challenges
today, we maintain a forward-thinking strategy regarding automated risk management. We will continue to lead the market by introducing
innovative solutions like ComplianceAnalyzer LIFT that not only address timely issues such as the new credit rating agency due diligence
criteria but also help rebuild confidence in the mortgage industry. Our focus right now is on providing transparency and risk mitigation
to help transform the way that the mortgage industry operates. To that end, we believe that ComplianceAnalyzer LIFT will be true to its
name, helping to lift investors' confidence in the mortgage industry."
About ComplianceEase®
ComplianceEase, a division of LogicEase Solutions Inc., headquartered in the San Francisco Bay Area, is a premier provider of intelligent
business solutions to the financial services industry. ComplianceEase's patented platform includes ComplianceAnalyzer - the mortgage
industry's leading automated compliance solution. ComplianceEase combines industry and regulatory compliance expertise with innovative
technology to power beginning-to-end solutions in a fraction of the time and for a fraction of the cost of traditional approaches,
while providing high levels of accuracy and integrity. ComplianceEase's significant and growing client base includes 4 of the top 5
mortgage lenders in the nation, and over 250 financial institutions, service providers, and regulators. Managed by a team of highly
experienced and innovative mortgage professionals, the company is funded by the First American Corporation, the WI Harper Group, and
the senior management team. For more information about ComplianceEase, visit
www.ComplianceEase.com.
