Frequently Asked Questions
Q. What makes ShareDiligence different from other systems?
A. Everything. Inherently the concept of safety in numbers and the power of collaborative association conceptually distinguishes ShareDiligence. On a more granular level, the use of attorney reviewed industry specific questionnaires provides greater flexibility and reliability.
Q. Do you provide a rating system for lenders to evaluate vendors?
A. We believe the use of a rating system is inherently too subjective and unnecessarily binds the hands of lenders. For example, if a title company gets sued because of the actions of an employee terminated 3 years ago, what is the risk of continuing to use that vendor? In reality there is no set answer but any rating provided by a compliance management company will obviously need to take a highly conservative view. Of course, this potentially over-conservative approach will bind the hands of the lender that cannot go against the advice of the vendor management company without incurring substantial liability. As such, under a subjective rating system, the use of this particular vendor may be unlikely but in fact, the vendor may pose little to no actual risk at this time. As such, while ShareDiligence will call attention to particular responses and information, selection of vendors is ultimately left to the lender’s discretion.
Q. How difficult is it to use ShareDiligence?
A. Not difficult at all. In fact we believe it is by far the easiest system to use. If you can enter an email address and look at the colors red yellow and green, you can use ShareDiligence.
Q. How long does it take to perform due diligence on vendors?
A. If the vendor has already been vetted on our system, once a lender types in their name and requests to be linked to the vendor all the vendor needs to do is hit “accept.” Similar to a friend request, at that point the due diligence process is complete and the lender has access to all relevant information, updates, and responses.
Q. What if the vendor is not currently on the system — how long does it take to perform due diligence?
A. If the vendor is not on our system, all the lender needs to do is provide an email address of the vendor contact. A link will be sent for the vendor to fill out the information. Once the vendor completes the questionnaire they are added to the system and the due diligence is complete. If vendors are responsive, due diligence can be completed not only the same day, but even within the same hour.
Q. Who do you consider a “vendor”?
A. We perform due diligence in a practical manner, considering the risk posed by the entity and potential for the lender to take remedial action. For instance, we do not perform vendor management on public utilities because there is no specific danger to a customer associated with the reliance on a utility related to a mortgage transaction. Moreover, even if some theoretical danger could be inferred, how is a lender supposed to remediate that harm? Lastly, public regulation and oversight of utilities is such that the likelihood of independently uncovering any danger that would escape public oversight is remote at best. Hence, we take a practical and strategic view towards due diligence that eliminates pointless inquiries that only serve to create needless paperwork.
Q. Do you perform Due Diligence on Servicing Companies?
A. We do not perform due diligence on are servicing companies at this time because under applicable laws those require onsite visits and thus the application of a technological vendor management solution is not possible. In the future ShareDiligence may begin to offer servicing vendor management at an additional fee but it is not available at this time.
Q. How do you offer this product at the price point it is available?
A. The beauty of ShareDiligence is that instead of sending out and monitoring 20 different inquires for 20 different lenders, our platform allow the sharing of information thus greatly diminishing the cost per user. We can do more with less because of the sharing of information.
Q. How reliable is ShareDiligence in terms of protecting lenders from vendor risk?
A. Given that the system is automated and utilizes technology for the due diligence process, we believe it is an inherently safer risk than a process run by individuals. Questionnaires cannot be forgotten either in terms of being sent or followed up on. Moreover, the inquiries are carefully sculpted to the industry and are updated every 90 days. On top of that, the system constantly monitors social media and other sources for any events involving a vendor. The community based portal also allows lenders to share information about vendors, meaning that the bigger the network grows, the stronger it is in terms of an information resource. Combined, between the attorney developed information requests and updates, the continuous monitoring, and the ability of community based information, it is hard to imagine how a lender could be faulted for not taking reasonable steps to evaluate its vendors.
Q. What do I do about vetting vendors that are selected by other parties to the transaction?
A: The first thing to understand is that if the vendor is not someone you are selecting for or recommending to the borrower then that person or entity is not considered your vendor, for who you are responsible for exercising due diligence. Understand that the CFPB and other agencies are only holding you responsible to the extent you control or in some manner facilitate the relationship with the vendor. When a borrower selects their own settlement company and/or a specific employment verification company is utilized at the direction of the borrower’s employer, then it is not a vendor for which you are held responsible under due diligence rules.