Sam Gendusa November 8, 2015

Newsletter - November 2015

I had occasion recently to chat with a local bank Loan Officer about the state of the mortgage industry, and the exchange really got me thinking. I’d like to share with you his perspective on the regulations being handed down from the Consumer Finance Protection Bureau (CFPB), as well as some interesting statistics on the subject, and discuss what it could mean for on-the-ground mortgage industry professionals like you. Here is (and I’m paraphrasing) what the loan officer told me...

We have had to hire 250 new employees to meet new CFPB guidelines and regulations. I think, in the end, the regulations that were supposed to reign in the “too big to fail banks/mortgage companies”) will actually end up driving the small lenders out of the market, because they can’t afford the costs associated with meeting compliances. And after that, the only ones that will be left standing are the big, bad banks that were involved in the irregularities that contributed to the crash in 2008.

Wow. Makes you think, does it not?

This will also make you think. A recent Collingwood Group Mortgage Industry Outlook Report (hat tip to Brian Honea and DSNews where I found the study), which polled mortgage industry professionals, mostly originators, found that:

  • 72% cited regulation as the top factor negatively impacting origination volume
  • 75% said that regulation is stopping them from lending to those that they think can afford and deserve a mortgage
  • 75% said their company would be investing heaviest in Process Efficiency and Compliance next year, compared to 13% who said Increasing Scale to reach more customers would get the most budget

So what does all of this mean for a professional in the mortgage industry?

Bottom Line: The only constant in this industry is change. If the CFPB (or another governing body) responds to increased pressure to lighten regulation, there will be new and different paper trails to document. If they don’t, there will be even more compliance standards to meet -- and you’ll need to be prepared to show the history of every transaction in your portfolio.

And on that point, Blue Streak Docs can help you. We can help you produce a paper trail for every move you make. And if you haven’t worked with us yet, you can try us out and get your 5th order FREE!

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