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Mortgage Lenders’ Top Complaint: CFPB Regulations

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A new QuestSoft compliance survey revealed Consumer Financial Protection Bureau (CFPB) regulations are a top concern for lenders in 2012.

Those participating in the survey answered nine compliance-related options to discuss their level of stress about the upcoming regulator changes issued by the CFPB.

Several CFPB-related regulations including the Truth in Lending Disclosure and the Good Faith Estimate were listed as the top ranking concerns. According to the results of the survey, these two rules accounted for 58.8 percent of concern among more than 425 mortgage lenders across the country.

Concerns about CFPB regulations that have yet to be defined was issued a high concern percentage of 52.7 percent by lenders participating in the survey.

Additional concerns include the Real Estate Settlement Procedures Act fee tolerances and the Qualified Mortgage Rule.

“Lenders have a justified reason to be concerned when facing a multitude of regulations that could jeopardize compliance,” said president of QuestSoft​, Leonard Ryan. “The Bureau is generally interested in working with industry leaders to make implementation and compliance as smooth as possible, however reforms and requirements can lead to stress and unforeseen consequences – especially if lenders are kept in the dark until the implementation date.”

Concerns about Dodd-Frank regulations also ranked highly among lenders. Dodd-Frank regulations were enacted in July 2010 in order to regulate the nation’s financial services industry. More than 49 percent of lenders gave the regulations high concern and have every year since the law passed.

“Dodd-Frank changes are a long train running and will directly affect everyone involved in the mortgage lending industry from now up until January 2014 implementation when a sense of certainty will hopefully be reestablished,” Ryan said. “Until then, lenders remain wary about pending regulations and how they will adjust business practices to meet standards and comply with federal and state laws.”

Rounding out the list of lender compliance concerns for the 2013 regulatory changes include fair lending exams with a 41.6 percent high concern ranking. With 27.8 percent high concern was the increased scrutiny of the Community Reinvestment Act and a 23.9 percent high concern with state consumer lending laws. Lenders were also 19.6 percent highly concern about the National Mortgage Licensing System and 19.6 percent highly concerns with the Secure and Fair Enforcement for Mortgage Licensing Act. Mortgage call reports was also listed as a source of high concern among mortgage lenders.

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