Attendees of this past week’s Mortgage Bankers Association Convention in Chicago, which Wolters Kluwer Financial Services was a sponsor of, readily anticipate an increase in regulatory scrutiny. The heightened focus on fair loan servicing, the outcome of the QRM/QM debate, risk retention, and of course, anxiety about the new CFPB, was pervasive in the sessions I attended.
Although the industry clearly believes that as survivors of the recent subprime lending crisis, they were not part of the problem, they do recognize that they will be part of the solution. Every regulator has made compliance with consumer protection laws and regulations a high priority, and banks and mortgage lenders need to stay ahead of the examiners who will soon be knocking at their door. That means paying a heavy price to keep up with the onslaught of complex laws and regulations. Bearing the burden of complying will take a substantial toll on the industry, but those who embrace technology will be better positioned to survive and prosper.
In particular, technology will help lenders and servicers better manage loan and borrower data that will be the focus of the new CFPB, according to Raj Date, the new de facto head of the agency, in his remarks to the MBA crowd. Shortly afterward, the CFPB also released its guidance on how the agency will begin examining servicers for regulatory compliance. In the guidance, Date says the CFPB will begin evaluating servicers by pre-examining them through data analysis, once again underscoring the need for lenders and servicers to maintain quality loan and borrower data.
Authored by Ed Kramer, EVP Regulatory Programs, Wolters Kluwer Financial Services
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