LO automation could be complicated by compliance. What if there’s a RESPA violation and charges are filed? Who goes to prison: the computer or the supervisor of the computer?...
In a recent letter to CFPB Director Richard Cordray, Rep. Emanuel Cleaver, D-MO, called upon the bureau to address potential abuses by financial technology companies that may be engaged in predatory small-business lending. In so doing, he asked that the CFPB “investigate whether fintech companies engaged in small business lending are complying with all anti-discrimination laws, including the Equal Credit Opportunity Act.” The congressman’s letter noted that fintech lending companies, also known as alternative small-business lenders, are a fast-growing industry offering a new wave of innovation, but they also pose many risks, he added. “Over the past decade, there’s been a very large increase of Silicon Valley start-ups and technology companies that are functioning like banks,” Cleaver said. “The CFPB ...
Housing finance reform, especially if it weakens mortgage underwriting standards, could have a negative impact on private-label MBS as well as the government-sponsored enterprises’ credit risk-transfer transactions, according to a newly published report from Moody’s Investor Services. Analysts said that various reform proposals could reduce the influence that Fannie Mae and Freddie Mac have in the market and likely increase credit risk in new MBS in the short-term. Combined with a rising interest rate environment, such reform could have a credit-negative effect. Loan origination processes and the kinds of loans produced could become...
Most lenders aren’t currently using so-called next-generation mortgage technology service providers, according to a survey conducted by Fannie Mae. High costs are among the reasons keeping many lenders from adopting technology that could ease the burdens borrowers face when obtaining a mortgage. Some 63.0 percent of the 184 lenders surveyed by Fannie in November said they haven’t used next-gen tech providers. Fannie released the survey results ...
Credit bureau Experian and data services vendor Finicity have partnered to come up with a digital verification capability to help bring the lending industry to the point where a “10-by-10” mortgage becomes the norm; that is, a loan application that can be completed in 10 minutes, and the resulting mortgage closed in 10 days. Experian said its new Digital Verification Solutions will provide verification of assets and income by utilizing Finicity’s data aggregation and insight platform ...
About one-third of the lenders surveyed by Fannie currently use technology service providers and another third are investigating next-generation technology service providers.
Mortgage lenders’ efforts at compliance with post-financial crisis regulation, largely from the CFPB, shifted their focus from fully implementing e-mortgage processes but also helped them develop the necessary technology to move forward with them in the future, according to a new report from analysts at Moody’s Investors Service. “Following the crisis, lenders focused on adapting technology to implement regulations such as the ability-to-repay [qualified mortgage] rule and the TILA-RESPA Integrated Disclosure rule rather than on e-mortgages,” the analysts said. “The implementation of those regulations has, however, led to advancements in the technology needed to originate e-mortgages by providing, for example, a seamless data feed between the mortgage loan application and the disclosure documents.” Further, “Some lenders and servicers have also ...
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