Compliance & Regulation

Although profit margins are still healthy for most mortgage banking firms, net income in the new year will continue to be impacted by "high" rep and warranty expenses, according to a recent report from Keefe, Bruyette & Woods.

What a surprise! A study by the Federal Reserve Board of New York found that speculative investors in real estate played a large part in the quick run-up and subsequent devaluation of housing prices, and are responsible for more of the financial crisis than previously thought. Wow! Turns out lenders were the victims after all, right?

Not so long ago, I mused in a column for this publication about the dearth of qualified underwriters available at a time when the industry is in desperate need of them. It was Hemingway who first introduced me to the concept of the Lost Generation, a situation that seems to have entered our reality today.

Safety, soundness, and compensation: These are words most often associated with the evaluation of large depository institutions. However, increasingly auditors are looking towards such standards in interpreting and implementing the newest regulations pertaining to compensation, and various guidelines applicable to nearly all financial institutions have expressly incorporated such concepts in evaluating an organization’s viability and compliance. Moreover, as a matter of profit maximization and risk mitigation, considering the balance of risk and reward in establishing compensation–especially for management–should assume top priority to an institution’s decision-makers.

Among pending mortgage industry regulatory deadlines some players could be in neglecting in 2012 are requirements for third-party MERS audits.

Mike Anderson last week resigned as vice president of government affairs for the National Association of Mortgage Brokers.

Seven individuals in the Cleveland area have agreed to plead guilty to bank fraud charges in the 2010 failure of St. Paul Croatian Federal Credit Union and will testify against the main figure in the case, a purported international crime figure.

If anyone thought the GSE 'Buyback Wars' would subside in 2012 all they have to do is read a recent SEC filing from Bank of America, the poster child of repurchase claims. The bank notes that the "criteria by which the GSEs are ultimately willing to resolve claims have changed in ways that are unfavorable to us."

As 2012 begins, the California Department of Real Estate is still warning consumers to be wary of promises for loan modification, mortgage relief and foreclosure rescue scams as fraudsters to continue prey on vulnerable, financially stressed homeowners.

The Financial Crimes Enforcement Network has extended the deadline for financial institutions to adopt the agency's new Currency Transaction Report and Suspicious Activity Report until the end of March 2013.