Streamlining Loan Processing with Accurate Payment Application & Regulatory Compliance
Overview.
Our client in the financial services industry faces challenges in their loan processing system. The current system creates bottlenecks, leading to lengthy approval times. Additionally, concerns exist around accuracy in payment application and adhering to evolving regulations. To address these issues, the client is seeking a solution that streamlines the entire loan processing process while ensuring accuracy and regulatory compliance. Importantly, the ideal solution should also prioritize borrower protection by minimizing unnecessary fees and preventing negative credit reporting.
Borrower payments were processed but not accurately applied to loan balances, leading to:
Interest accrual on loans: Even though payments were made, borrowers were charged interest due to inaccurate application.
Delinquency misclassification: Borrowers were mistakenly classified as delinquent due to the application issue.
Late fees were charged incorrectly:
Fees exceeded state-mandated limits.
Fees were assessed due to delayed/inaccurate application, not actual late payments
Solution.
Copasys Platform: An enterprise- wide solution for automated quality control, risk management and regulatory compliance.
Challenge 1: The implementation automated payment processing by setting target application dates based on key factors. This ensured timely payments and avoided audit issues, as "compliant" results were achieved when satisfactory payments were applied within the legal timeframe set by federal or state regulations.
Challenge 2: The implementation pre-defined state-specific late fee limits, preventing overcharging. It ensured payments were applied within legal timeframes, "compliant" audits were achieved, avoiding potential fines and ensuring fair treatment for borrowers.
