New buy-back mortgage insurance option now available through Ellie Mae

Financial Tips

Mortgage InsuranceNew Total Quality Loan program offers protection against compliance and fraud claims.

Ellie Mae, one of the top enterprise level providers of automated on-demand residential loan industry solutions has revealed that it will be offering a buy-back mortgage insurance option as a part of its Total Quality Loan (TQL) program.

The TQL program is an effort that has been created to improve the quality of loans, as well as their salability and compliance which originate from the Encompass360 mortgage management software system at Ellie Mae. It provides a suite of fraud valuation, detection, risk analysis, and validation services which are customized to the individual investor/aggregator’s needs.

The technology at Ellie Mae is tamper-proof and secure.

IT gives correspondent lenders the ability to share the data and findings that they obtain through those services with their various investors and the other stakeholders within the supply chain of the industry.

The TQL participating correspondent lenders also have the chance to purchase mortgage insurance that will cover them for up to $100,000 for each loan.

This coverage is underwritten by Lloyd’s of London and Liberty Mutual Group affiliates.

It provides protection to the lenders against the losses that could occur as a result of appraisal or borrower fraud, or non-compliance with the regulations. For instance, a seller is protected through the policy against a claim that has been made based on a false statement regarding assets or income, or occupancy or employment fraud, in addition to fraud relating to valuation or collateral.

Moreover the coverage also extends to the losses incurred if a loan is determined not to comply with any number of official regulations, such as the Federal, State and Local High Cost Thresholds Review, the Federal Truth in Lending Act Tolerance Tests (HOEPA), the “HUD-HOEPA” Mortgage Thresholds Reviews, and the Fannie Mae Points & Fees.

The mortgage insurance starts at the origination date and continues for the following three years. The coverage is then transferred automatically with the loan’s ownership so that it doesn’t matter who owns the loan when a compliance error or fraud is detected, the claim can be filed directly through the policy instead of having to move backward to the original lender.


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