Regulators likely will increase enforcement of the Real Estate Settlement Procedures Act, with an idea toward sham 'affiliated business arrangements,' according to former FHA commissioner Brian Montgomery.
“As you know, there has been very little enforcement in this area for several years and now that the CFPB has purview I think you can expect that to change,” Montgomery said, speaking late this week at an MBA trade show in New Jersey.
Montgomery also predicted the industry will see an uptick in fair lending and fair housing complaints. (In the fair lending area the Consumer Financial Protection Bureau and HUD have joint responsibility.)
Another area to watch, Montgomery said, is Qui Tam lawsuits filed by whistleblowers with the Department of Justice.
In the past three years HUD and FHA have been busy tracking and taking action against FHA lenders that violated underwriting guidelines but with those cases beginning to ease up regulators are expected to turn to RESPA and affiliated business arrangements.
Mortgage executives told NMN recently that two 'ABA' areas to watch are under the table deals between Realtors and originators, and steering by home building companies to their mortgage affiliates.
Montgomery currently serves as chairman of the Collingwood Group, a Washington-based financial services consulting firm.
