Fiserv, the global provider of financial services technology solutions, has announced that its Loan Servicing Platform is designed to assist customers in complying with the new Truth in Lending Regulation Z rules that require an escrow account for taxes and insurance on home equity loans. The change becomes effective on April 1, 2010.
The company has claimed that the the Loan Servicing Platform is a system that has the capability to manage escrow accounts for any type of loan, including home equity loans.
Reportedly, financial institutions offering loans qualifying as higher-priced mortgage loans will now have to have the software and infrastructure necessary to collect and administer additional escrow accounts.
Cathy Martin, vice president, consumer loan products, loan servicing solutions, Fiserv, said: “This regulatory change will present challenges for many financial institutions, so it is crucial that lenders are aware that the functionality that used to be exclusive to the traditional mortgage market – such as escrow – is now required on the consumer loan side.”
“Lenders will need to know some basic escrowing procedures such as how to conduct an escrow analysis, how to prepare the initial and the annual escrow account disclosure statements, and how to keep the appropriate records for auditing and risk-mitigation purposes. Otherwise, they will face penalties, he added.
