Mortgage Cadence Spins Off Compliance Department Into Separate Entity

NewImageMortgage Cadence, LLC, is spinning off its compliance, content, and document preparation service, Mortgage Cadence Finale, into a separate entity called Finale Document Services, originally a part of the company’s Enterprise Lending Solutions Orchestrator program. The company’s CEO says the service prepares lenders to be fully compliant, thus reducing risk of loan buy-back requests.

Mortgage Cadence, a provider of ELS Default Servicing Technology and Document Services for the financial services industry, says the tool allows lenders to create initial disclosures, interim packages, closing packages, loan modification packages, short sale documents and any other financial document, and quickly and securely deliver them to the borrower or settlement agent.

“We’ve been in the compliance, content, document creation and management business since 1999 and have invested tens of millions of dollars into this product line and the seasoned team that supports it,” says Michael Detwiler, chief executive officer of Mortgage Cadence. “We have streamlined implementations and eliminated document-related problems and compliance issues while increasing client satisfaction across the board.”

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The company says Finale’s features include the ability to generate forms dynamically for each individual and unique transaction, eliminate re-keying of data, automate the document generation/distribution processes, and maintain strict compliance. The forms are compliant with Fannie Mae, Freddie Mac, FHA, and Veteran Affairs programs, and the system can provide document preparation for a variety of loan types, including first and second mortgages and forward and reverse mortgages.

The program’s ability to assess the data coming from a certain system of record, and then creating the appropriate documents systematically in real time, says the company, makes it different from other document preparation services which generally utilize extensive forms libraries. Mortgage Cadence says the return on investment for this system is “unrivaled” because it’s easier to navigate and maintain.

“Finale delivers the document set that is required in complete compliance, regardless of the type of product or the jurisdiction,” Detwiler says. “We have a team of attorneys and compliance professionals ensuring our clients will be protected. The days of having an originator click boxes to determine what docs get included are over. The risk is simply too high. Lenders taking a loose approach to documents will fall out of compliance and be asked to buy loans back. Buyback requests for document-related issues are not as common now, but make no mistake, they will be.”

Written by Alyssa Gerace

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  • Alyssa,

    I apologize for not welcoming you on board before.

    What is the significance of the “spin off?”  Technically a spin off is where a parent corporation (an LLC is not a corporation) creates a majority (mostly wholly) owned subsidiary and puts existing operations into it for the purpose of reducing liability exposure or for the purpose of an immediate or future sale.

    This “spin off” seems more like a means to promote the “spun off” operation than something with a more meaningful business purpose.  In other words this looks more form over substance than anything else.  Please do not misunderstand, promotion is a big part of business but not a principal reason for a “spin off” transaction.

    Did anyone explain the purpose behind the “spin off?”

  • Thanks for the welcome! There are a couple ways to define “spin off” and I believe you are referencing the commerce-oriented definition. However, Mortgage Cadence called its document preparation system a “spin off” in the sense that it’s a development of a similar program. 

    • Hey Alyssa,
       
      Thanks for the reply.
       
      Generally a phrase like “Mortgage Cadence, LLC, is spinning off its … Mortgage Cadence Finale, into a separate entity called Finale Document Services” means that one legal entity (MC, LLC) has created a new and separate legal entity (FDS) and placed one of its divisional operations (MCF) into it.
       
      Reading the announcement and the FDS website that is what seems to have happened.  The FDS website states:  “Finale Document Services (a loosely associated sister company of Mortgage Cadence, LLC.)….”
       
      If my interpretation is right, my question is what is the legal relationship of these two separate legal entities and why was the “spin off” done?  Oh, I forgot to add some other reasons for a spin off and that is to comply with a court or regulatory decision or in compliance with some kind of contractual agreement or legal settlement where is no court determination.

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