Forty-one percent of mortgage lenders feel they are not ready for the August 2015 Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure Rule, according to a study by Capsilon Corp.
The study, which polled more than 100 executives from leading lenders during the Mortgage Bankers Association's technology conference earlier this month, also found that only 12% of respondents felt "very prepared" for the August requirements.
Furthermore, 80% of those polled said their companies' loan production costs will rise in 2015 year-over-year due to their focus on compliance-related activities. Another two-thirds said they had hired additional in-house or outsourced staff to deal with compliance.
The survey also recorded a stronger tilt toward improving technology: 82% of executives interviewed said they envision spending somewhat to significantly more on technology in 2015 versus the previous year.
"The survey results clearly indicate that many lenders don't have the right technology in place to handle the requirements of TILA-RESPA, and are scrambling by hiring more labor to help close the gap, which only drives loan production costs higher," said Sanjeev Malaney, chief executive of Capsilon, in the April 14 press release announcing the survey results.
"This is an unsustainable model, and lenders should be embracing technology to automate compliance and tolerance checks, not hiring more people."
San Francisco-based Capsilon is a provider of document and data management solutions for mortgage lenders and investors.
