A recent article in American Banker stated that because of the Consumer Finance Protection Bureau’s new regulations, banks are creating fewer mortgages. This is understandable when underwriters are facing stricter requirements and don’t want to take the risk associated with less qualified borrowers.
However, it does pose a problem when we remember that the new TILA – RESPA Integrated Disclosure Rule hasn’t even been implemented yet. How will this regulation affect banks’ loan originations?
And that’s not all.
The CFPB is Only Halfway Through Implementing New Regulations
If the CFPB’s directive schedule were compared to the timeline of a week, right now it’s only Wednesday. They haven’t stated anything regarding what new rules are coming in the future but, if it’s anything like what they have already changed, it’s not going to be free cupcake day on Friday.
When you are already exhausted from Monday and Tuesday, realizing that you are only halfway through the week can generate feelings of incredulity and frustration. Are these the kinds of feelings that compliance officers, loan officers and title agents in the home buying process are experiencing at this point? From what we’ve been hearing throughout our travels, it is.
How Is Your Mortgage Business Faring With the Upcoming CFPB Rules?
Here at ATS Secured, we frequently question how the various groups in the mortgage industry feel about the upcoming changes. Is it something that keeps you up at night? What strategies does your financial institution have in place to ensure compliance with the CFPB? Are you certain that they are enough to hold water when the time comes?
Just yesterday, the CFPB issued a consent order with the auto finance company First Investors Financial Services Group, Inc. First Investors has agreed to pay $2.75M in penalties stemming from allegations that they knowingly didn’t fix problems in a 3rd Party consumer credit reporting system (http://1.usa.gov/VEP3Wq). How many other lenders, both home and auto, are not prepared for level of scrutiny?
These can be difficult questions to answer, but they are vital to your company’s health and future. As Benjamin Franklin once said, “By failing to prepare, you are preparing to fail.” To invert that statement into a positive one—by succeeding to prepare, you are preparing to succeed.
Though this “week” might seem to drag on, Friday is coming sooner than we might think.
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