Wednesday
October 22, 2014

Many Closings Temporarily Stalled After Ellie Mae Outage

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Many Closings Temporarily Stalled After Ellie Mae Outage

Ellie Mae, a mortgage technology developer, faced a series of outages and service disruptions that delayed loan closings on Monday and Tuesday. The outages were believed to be caused by a malicious attack on its software programs. But Ellie Mae assured its customers in a statement that no data breach had occurred and no client personal data had been compromised.

Delays in many loan closings were caused by outages of Ellie Mae’s Encompass loan origination system, which Ellie in the past has estimated to handle more than 20 percent of all mortgage transactions nationwide.

“Ellie Mae is experiencing an issue with Encompass that is affecting a number of our clients,” Jonathan Corr, Ellie Mae president and COO, confirmed in an e-mail to lenders. “This is resulting in delays in processing loans, or in some cases, the inability for some of our clients to close loans.”

In some cases, lenders were forced to pay for rate lock extensions and hedge losses due to not being able to close on loans. Also, home closings funded by purchase mortgages also have been delayed, the National Mortgage News reports. Many loans at all stages of the underwriting process — from obtaining client credit reports to even generating closing documents — were also affected since they use technology through the Ellie Mae network.

“We recognize the critical role our services play in enabling our clients to serve their customers and deeply regret the inconvenience and delays they are experiencing,” says Sig Anderman, founder and chief executive officer of Ellie Mae. “The performance and security of our platform is our number one priority. We are doing everything within our power to restore full operations as soon as possible.”

Source: “Denial-of-Service Attack Likely Culprit in Ellie Mae Outage,” National Mortgage News (April 1, 2014); “Massive Software Outage Brings Some Mortgage Operations to a Standstill,” Mortgage News Daily (April 1, 2014); and Ellie Mae

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