Since the election of Donald Trump, the legitimacy and very survival of the Consumer Financial Protection Bureau is now front and center. The agency is in peril after an Oct. 11 decision by the U.S. Court of Appeals for the District of Columbia Circuit that ruled, for the first time, that an independent agency established by the legislative branch of government is unconstitutional.
Where was the commentary about how the lending industry is making the mortgage process easier for customers by embracing digital technology? What about compliments to mortgage lenders who are trying to streamline a difficult process?
If the underlying goal is to provide less negative ammunition for media outlets and improve the industry's image, it is counterproductive for lenders to speak against those regulations protecting the consumers.
The CFPB is currently paying close attention to the individuals/small players, as well as the larger institutional mortgage companies. With respect to the small players, the CFPB is looking at the loan officer, real estate agent and developer. A common violation that these smaller firms or individuals commit, in addition to possible violations resulting from social media posts, stems from agreements among themselves.
The mortgage industry is leveraging technology like never before, streamlining processes across the spectrum of lending, servicing, investing and real estate. The combination of regulatory pressure and consumer expectations have set a high standard for efficiency and transparency, requiring a significant investment of time, money and talent to hit the right notes for both.
Ironically, the monkey on the mortgage industry’s back for the past 10 years — increasing regulation — is the very thing that forced companies to find efficiencies in every part of the process, which serves them well as they look to engage tech-savvy consumers. Even as the enforcement of some of those regulations is now in question, the long-lasting benefits of investing in automation will stand.
Mortgage banks have traditionally been slow to embrace new technologies, and while the technology that has improved efficiency, security and customer experience in a multitude of other industries (transportation, education and retail, to name a few) is finding its way into the loan production process, a lot of opportunity still exists in other stages of the mortgage life cycle.