Risk Management

"One bad loan can eat up an entire month's profit," said Kevin Marconi, the chief investment officer at United Fidelity Funding.
The Consumer Financial Protection Bureau and Fannie Mae may actually be helping banks and mortgage lenders boost their bottom lines through better oversight of their third-party vendors.
"Compliance applies to everything," said Tom Wind, Everbank's executive vice president of home lending. "There's a whole different mindset you need to manage the business."
New regulatory and investor compliance requirements have put a renewed emphasis on quality control measures. But lenders are discovering the additional costs of these efforts are outweighed by the savings from originating fewer defective loans.

HEARING THEIR PAIN? By switching charters and escaping the QTL test, Berkshire Hills Bancorp will have "greater flexibility with respect to the future of commercial lending," CEO Mike Daly (left) said. Comptroller Thomas Curry said the test should be eliminated so federal thrifts can "adapt … to changing economic and business environments."
One reason so many federal thrifts have switched to other charters is that the Qualified Thrift Lender test impedes their commercial lending. However, a top regulator says he wants it eliminated.

"I wish FHFA's IG would have called me because we could have explained a lot of this stuff away," said Ted Tozer, president of Ginnie Mae.
Ginnie Mae President Ted Tozer took issue with a government watchdog report that criticized both his agency and the government-sponsored enterprises for failing to catch the massive fraud at Taylor, Bean & Whitaker.

Lee Farkas, former chairman and CEO of Taylor, Bean & Whitaker, received a 30-year prison sentence for his role in the multibillion fraud scheme. Image: Bloomberg
Fannie Mae, Freddie Mac and Ginnie Mae all overlooked warning signs about Taylor, Bean & Whitaker that make them partly to blame for the mortgage lender's multibillion fraud scheme, according to a government watchdog report.

Brian Moynihan has been in charge of Bank of America for nearly five years, and he has spent most of that time in lawyer mode, overseeing settlements worth $48 billion. He is generally praised for taking the bank to this point, but now comes the hard part: getting B of A to grow again.
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