Some, if not most, mortgage market players look at the new rules coming out of the Dodd-Frank Wall Street Reform and Consumer Protection Act as one huge pain in the neck. Maybe even a pain in another body part. But not Jill Belconis.
The chief executive officer at the Shelter Mortgage Co. in Milwaukee, Belconis sees the law and the consumer watchdog agency created under it as "an opportunity."
"You can either pack up your bags and go home or put on your armor and go forward," she told an audience of some 200 members of the Real Estate Settlement Providers Council who gathered in Washington earlier this month for the group's annual conference.
Belconis and her 30-year-old company have chosen the high road.
"Compliance is what it is," she said. "You have to take it on, one thing at a time, and deal with it."
Noting that change is always a constant, the 30-year industry veteran warned that it is "easy to lose focus" in tough times. That's why company executives should work on keeping a positive culture at their firms.
"You don't want your loan officers worrying," she said. "The culture of your company should be, ‘We're going to get through this.’ It's all in the attitude."
Don Wold, senior vice president and general counsel at Old Republic National Title Insurance Co. and the panel's moderator, agreed. "If you are providing a value product, you will succeed," he told the crowd.
But others weren't so sure.
Jo Ann Barefoot, co-chair of Treliant Risk Advisors and a former deputy Comptroller of the Currency, told the conference that the mortgage business is "stuck in the middle of high-level chaos."
"It's possible," she said, "that everything you been doing might be illegal."
Barefoot, who sits on the consumer advisory board of the Consumer Financial Protection Bureau, said the agency created under Dodd-Frank is "trying very hard" to avoid harming the real estate market.
The CFPB is "very open to input," she said. "But at the same time, everything they put out is very complex."
The management consultant said the CFPB believes in the structural aspect of business-to-business relationships and is taking "a very holistic look" at them. But in the agency's "high-level" view of B2B, she warned. "individual companies can be harmed."
She said the business-to-business relationships "are way high up on the CFPB's radar screen."
The "overarching issue" at the consumer bureau is its "tremendous mandate of fairness," she told the industry's service providers. "So be ready to defend what you are doing in terms of basic fairness to consumers."
Another panelist, Steve O'Connor, senior vice president for public policy and industry relations at the Mortgage Bankers Association, told the conference that lenders should be in the business of lending. But right now, he said, they're in the compliance business.
And as a result, O'Connor ventured, lenders are likely to remain conservative when it comes to originating mortgages. "Already tight credit is likely to become even tighter," he said.
But even lenders who play it safe can be caught in a "Catch 22," the MBA executive added. "You can have a business practice, but you have to provide you have a business reason to justify it."
In another conference session, meanwhile, a couple of compliance attorneys warned that companies are responsible for their vendors, and their vendors are responsible for their vendors, and so on down the line.
But in the end, said Jason McElroy of Weiner, Brodsky and Kieler, lenders will ultimately be responsible for everyone down the line. And as a result, added Francis Riley of Saul Ewing, lenders "need to understand how vendors interact with consumers."
"The onus is on you to make sure they are being fair," said Riley.
Riley said it is "doubtful" the CFPB will do "a deep-dive" investigation to make sure lenders are following the rules, at least at first.
"If you have policies and practices in place and indicate you follow the rules, that will get you to third base," the compliance attorney said. "But hopefully you won't get caught in a run down between third and home. Nothing is black and white; it's all gray."
Lew Sichelman is an independent journalist who has been covering the housing and mortgage markets for more than 40 years. He can be reached at
