Employing an integrated compliance strategy has never been more important. Dozens of new mortgage-focused regulatory requirements are expected to take effect within the next several years as a result of the Dodd-Frank Act. One of the more dramatic changes taking place is the combination of the Truth-in-Lending and Real Estate Settlement Procedures Act disclosure documents. The final combined disclosure will represent a major shift in disclosure requirements by incorporating information about interest rate charges and settlement fees.
In addition, regulations requiring documentation of the borrower’s ability to repay, monthly statements to be sent on consumer mortgages, making changes to various terms and conditions in consumer notes and mortgages and requiring lenders to retain a percentage of the risk of loss in sold loans are all required to be issued in final form by January 2013, meaning the proposed, and many final, rules will come out in 2012.
Producing quality loan documents and maintaining the integrity of borrower data within them will be critical for both lenders and servicers as part of meeting these new requirements. In fact, the CFPB will make doing so a focal point in its upcoming examinations, according to Raj Date, when he made his remarks at last October’s annual Mortgage Bankers Association conference in Chicago.
Shortly after the event, the CFPB also released its guidance on how the agency will begin examining servicers for regulatory compliance. In the guidance, Date says the CFPB will begin evaluating servicers by pre-examining them through data analysis, once again underscoring the need for lenders and servicers to maintain the quality of borrower data along with loan documents.
Technology can help lenders and servicers play an instrumental role in achieving this more effectively and efficiently if employed as part of an integrated compliance strategy.
