The Federal Reserve Board and the Federal Trade Commission have completed final rule making pertaining to Risk-Based Pricing Disclosures (FACTA section 311). This Federal law requires that as of January 1st, 2011, a Risk-Based Pricing Disclosure (RBPD) calculation be done and appropriate notices be provided to consumers subject to “materially less favorable terms than the most favorable terms.” These new requirements apply to all mortgage brokers, correspondents and lenders and impact all consumers that have credit data and/or scores accessed for a risk-based pricing decision, regardless of loan approval status.
Credit Technologies has developed a turn-key method to automate these requirements through our FACTA Compliance Service (FCS). This includes the existing FACTA Notice to Home Loan Applicant and Consumer Score Disclosures in addition to the new Risk Based Pricing Disclosure requirements.
Why Credit Technologies
Automated Disclosure Compliance includes:
All disclosures are issued in your company name and reflect your return address for tracking and for use as a Red Flag detection tool.
Calculating each consumer’s comparative score and national score average per scoring model utilizing the form B-3/H-3 or B-5/H-5 exception method
Creating the required Risk-Based Pricing Disclosure, Score Disclosure and related required language
Creating the required Notice to Home Loan Applicant
Maintaining historical records sufficient to satisfy compliance with any lender or agency inquiry or audit as it applies to the above FACTA disclosure requirements
Issuing the combined disclosures via First Class US Mail to each applicant individually
Providing a Certificate of Compliance to each end user for use in the event of audit or investigation
The New RBPD Requirements Vary From The Current FACTA Required Notice To Home Loan Applicant & Consumer Score Disclosure Requirements In 3 Important Ways
Each risk based pricing disclosure must include the decisioning credit score and a comparative study showing how each consumer’s credit score relates to others using that specific scoring model.
Whereas the existing FACTA notices allowed for combining of joint applicants, the Risk-Based Pricing Disclosures are required to be sent individually, under separate cover. These disclosures cannot be combined with any other non-FACTA documents and/or required disclosures.
A unique disclosure is required in instances where a credit score is not available (form B5).
The best technology Is useless if you
can't depend on the people behind the scenes
The best technology is useless if you can't depend on the people behind the scenes
We’ll walk you through the process and determine the options that deliver maximum cost savings and lead generation opportunities.