Two hundred forty-nine.
That's the number of unique data points necessary for the Uniform Closing Dataset (UCD), a common collection of data that lenders will be required to deliver in a digital file with each mortgage loan they sell to us starting on Sept. 25. Known as the UCD mandate, this requirement is part of the Uniform Mortgage Data Program® (UMDP®), an industry-wide drive to build a better housing finance system in the U.S.
In fact, we're working with Fannie Mae at the direction of the Federal Housing Finance Agency (FHFA) to ensure that the UCD will provide a consistent approach and a common language for describing the information included in the Consumer Financial Protection Bureau's (CFPB) Closing Disclosure. At a macro level, it'll promote more efficient data integration and information exchange across the mortgage industry.
On the surface, creating a file – even one with hundreds of data points – doesn't seem so tough. But programming systems to automatically gather information from other systems spread across a lender's business and assemble it all in an extensible markup language (XML) file is complicated. Each data grouping – fees, cash to close, loan type, loan term, and much more – has to appear in exactly the right order and exactly the right format within the XML file. In fact, there are more than 6,100 rules that the file must follow.
I hope this gives you a better idea of this project's complexity – and its importance.
So what does this mean for those of you in the loan origination business? This is a good time to check out Loan Closing Advisor®, one component of Freddie Mac Loan Advisor SuiteSM, our smart, end-to-end technology solution for loan origination and delivery. Loan Closing Advisor collects the UCD and the Closing Disclosure and compares your data against the 6,100+ UCD specifications, testing for completeness, validity, data consistency, calculation accuracy and purchase eligibility. Then it provides feedback to help you identify and correct errors before you close a loan. This can save you time and money and reduce the likelihood of loan remediation and delivery delays.
If you haven't started using Loan Closing Advisor yet, we've compiled a list of verified technology integration vendors that may be able to help you. If you want to use one that isn't on our list, your vendor of choice should complete the verification process by March 31.
A number of loan origination system (LOS) providers, including Ellie Mae®, maker of the Encompass Lending Platform™ and Encompass all-in-one mortgage management solution, and Black Knight's LoanSphere® Empower®, are working with us to ensure they're on track to integrate with Loan Closing Advisor and support compliance with the UCD mandate. If you're not sure where your LOS provider stands, we recommend checking in to be sure they'll be verified by March 31.
With only eight months left until Sept. 25, we've developed calendars with defined milestones to help everyone stay on track. If you're building your own Loan Closing Advisor integration, we've published a timeline to guide you through the process. However, it seems that most lenders are using third parties to implement off-the-shelf solutions so here's our timeline for you:
Your vendor should begin testing its ability to deliver the XML file through the Loan Closing Advisor web interface or through system-to-system delivery. Loan Closing Advisor will provide feedback to help you identify and correct errors before closing loans, saving you time and money and reducing the likelihood of loan remediation and delivery delays.
This is the time for vendors to validate and adjust their systems' integration with Loan Closing Advisor. They can review the UCD technical specifications and the Implementation Guide on our UCD page. This timeline for vendors contains more detail.
If your company enforces a 90-day lock-out period after new applications are deployed, your UCD-related technology and operations must be in place by June 25.
Congratulations! During this time period, if your XML file is accurate, you can begin using Loan Closing Advisor in production to close loans with confidence and reduce your repurchase risk related to closing data.
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