Government regulations and compliance changes are making it difficult for mortgage professionals to do business in the current environment, while outdated technology and manual processes are impeding the workflow, according to a new Genpact study. Faced with new regulations and a slow housing recovery, the mortgage marketplace badly needs new technology solutions and improved business processes, said the study, which was compiled for Genpact Limited, a provider of ...

Mortgage industry participants reading tea leaves expect that the Consumer Financial Protection Bureau will write a definition of “qualified mortgages” that covers about 90 percent of current production, and they suggest that the long-awaited final rule could even boost originations. However, concerns remain about the liability that will come with QM originations and the clarity of the QM definition. Speakers at a panel discussion hosted by the American Securitization Forum this week predicted that the pending QM rule will cover a large majority of current mortgage production, based on previous comments from Richard Cordray, director of the CFPB. Edward Mills, a research analyst and senior vice president at FBR Capital Markets, added...

The mortgage industry is fearful of expanded liability after the Consumer Financial Protection Agency reportedly asked financial institutions with wholesale mortgage operations to monitor and ensure correspondents’ compliance with consumer protection laws and regulations. Lenders are said to be anxious about being held liable for purchased defective mortgages originated by unaffiliated third parties, and they are wary about new entrants that are trying to fill the void left by the traditional, larger players when they exited the wholesale broker/correspondent market. The CFPB has not issued...

The memorandum of understanding (MOU) announced recently between the Consumer Financial Protection Bureau and the Department of Justice does not represent a major policy shift but could lead to more referrals of fair lending cases to the DOJ, according to industry lawyers. Compliance attorneys said information-sharing between the two agencies will likely trigger new fair lending inquiries into origination and servicing practices. In addition, both agencies subscribe to the disparate impact theory and are expected to continue to push it, attorneys noted. The new MOU supplements...

Fair lending enforcement moved to a new level last week when the CFPB and the Department of Justice signed an agreement to strengthen the coordination of their efforts in this regard as well as to avoid duplication. The good news for the industry is any effort to reduce government duplication could similarly reduce lenders’ compliance burden. Under the memorandum of understanding the agencies signed, the CFPB and Justice will meet regularly on investigations and establish strict confidentiality for shared information...

Last week, the U.S. Court of Appeals for the D.C. Circuit cast some doubt on the validity of President Barack Obama’s controversial recess appointments to the National Labor Relations Board – and by extension, that of Richard Cordray as director of the CFPB. Noel Canning v. National Labor Relations Board involves a challenge to the president’s recess appointments to the NLRB in early January – during a period when the Senate was holding pro forma sessions every three days specifically to deny him the opportunity to make...

The CFPB recently joined in the filing of a motion to dismiss a case that includes a legal challenge to President Barack Obama’s controversial recess appointment of Richard Cordray as the bureau’s director.The eventual outcome of State National Bank of Big Spring, Texas, et al. v. Geithner, et al., could be significant in that it might affect not only Cordray’s appointment but an entire new level of regulatory oversight at the bureau that was inaugurated by, and in fact dependent upon, the appointment of a director at the bureau. Most notable among them would be nonbank mortgage lending...

As anxious as mortgage lenders are about the apparent delay in the CFPB’s issuance of an ability-to-repay/qualified-mortgage final rule, industry attorneys, trade group experts and consumer advocates unanimously believe that bureau is taking so much time so it can put out the best, most balanced rule as possible. Carrie Hunt, general counsel and vice president of regulatory affairs for the National Association of Federal Credit Unions, said she isn’t as concerned about when the rule comes as she is about the quality of it...

Chicago will be the first city to directly report financial activity and fraud to the CFPB, under an information-sharing agreement announced last week by CFPB Director Richard Cordray and Chicago Mayor Rahm Emanuel to help protect the city's consumers from scams related to payday lending, small-dollar loans, student loans, reverse mortgages and home repairs. "We want to learn from and expand on the ways you protect consumers, and to share these approaches nationwide," Cordray said in a press conference...

Exceptions are part of any business, and when it comes to fair lending risk exceptions, "certainly the CFPB acknowledges that," said compliance expert Tammy Butler with Optimal Blue. However, officials at the bureau are concerned with when lenders give exceptions, for what reasons and whether or not they are given fairly. "To do that, you have to have policy and monitoring," she said. Butler then provided the following checklist to help lenders build their exception policy and procedures...