Frustrations in the Mortgage Industry

In May, I experienced balmy Florida weather and enjoyed lots of good food and friends by attending the Mortgage Bankers Association’s Legal Issues conference in Boca. As has been the trend over the last 18 or so months, each subsequent compliance conference is sporting record attendance by folks that are concerned—scared—about the pending changes to the mortgage lending landscape. This time, there were over 800 attendees—more than ever before.

I was one of the presenters for the conference session on marshalling technology to comply with the new Consumer Financial Protection Bureau rules. Instead of relying on fact-filled Powerpoint slides on how technology can bridge gaps, I turned the discussion into more of a town hall meeting. What I learned from that experience was fairly alarming…although unfortunately, not at all surprising.

I asked the audience two basic questions: 1) have you completed your scoping and analysis of the new Home Ownership Equity Protection Act, Qualified Mortgage and ancillary rules as they apply to you organization; and 2) have your senior leadership teams signed on to the structural changes you recommended?

The audience was nearly unanimous in acknowledging they have scoped the new rules and prepared detailed analysis for their respective companies. In fact, only one poor soul acknowledged that she hasn’t yet done that work. However—half the audience acknowledged that their senior leadership teams were not signing on to the necessary changes that must take place to prepare for the new rules.

You heard me right—half of the audience said that their management teams weren’t listening.

Folks, this is a rather ugly situation we are in. Granted, it was an unscientific a poll, but it is telling.

The exasperated audience went further than that during our discussion. Their number one complaint was that the rules are still largely undefined, with gaps and holes and missing interpretations. They argued that no matter how much analysis they do today, much of it is worthless until the rules are completely final.

The CFPB is of little help in this regard. Much needed information, like clarification of the loan officer compensation rule, appears to be trickling out of the bureau at a snail’s pace. We are in crunch time now, with roughly just six short months to go until some of the major new rules take effect.

It’s no wonder compliance professionals in our industry are pulling their hair out right about now.