Pressure Points: New Regulations
The survey focused on a seasoned group of industry veterans who are originating huge numbers of loans and are being well compensated for it. Yet, they are frustrated by the massive increase in rules and regulations that must be painstakingly navigated in order to close loans, and they are facing unwelcome additional regulations affecting everything from how they are compensated to how they market their services to the training standards they must meet.
Specifically, top producers were asked which regulatory changes in the industry were most challenging for them. Numerous respondents mentioned changes in compensation rules. Others expressed frustration with new rules regarding appraisals. Many respondents cited the general rush to increase regulations.
As one respondent remarked: “We have become compliance officers who occasionally get to do a loan.”
Here is a selection of candid responses to the question, “What are you most concerned about currently on a regulatory or compliance level?”
It should be noted that in the survey, a few top originators commented favorably about the tougher regulations. From their perspective, not only will the regulations reduce or end the improper practices that were rampant a few years ago, but they personally will benefit because competitors will leave the business.
As one California-based survey respondent wrote, “I think the licensing requirements should be tougher …and if someone fails their NMLS test twice, they should have to wait one year before they can take it again. I also think that everyone [in California] should have to get a California Department of Real Estate license to go along with the NMLS license. This will get rid of all the non-professionals.”
Regardless, most originators feel that the regulations have already gone too far.
However, they recognize that the rules appear likely to stay intact.
Firms must find ways to help their originators achieve compliance, but with the least disruption possible to company business processes. Firms will need to invest in additional training and continuing education and they will have to install systems that help to automate aspects of compliance, such as e-mail retention and loan documentation.
So, you’re interested in refinancing your mortgage. Maybe you want some extra capital to do that home project you’ve always dreamed of, interest rates are nearing record lows, or you want to start consolidating debt. Regardless of the motivation behind the refinance,...