what mortgage executives think? thought it did, but only by the slightest margin–12 ayes to 10 nays. Q38 wondered if respondents thought that the CFPB would ultimately benefit consumers. Cynical, maybe, but 18 said no net benefit compared to the five that did see enough benefit to exceed the cost. Q39 asked the executives to grade the CFPB on its first full year of operations. The group gave it a C- for 2012, but there were seven Ds among the 23 responses. Q40 asked the lenders how well-prepared their firms were for the Jan. 10, 2014 implementation date for QM and the new servicing regulations. The group’s mean was a 5.7 on the one through 10 scale. The range of responses was from one to 10, suggesting the question was open to too much interpretation, and thus, the responses weren’t useful in getting to the heart of the matter. The final questions concern the entity at the center of the financial markets, none other than the Federal Reserve. Q41 questions if the spike in house prices last year (Case-Shiller +9.3 percent) was driven by market fundamentals (supply and demand) or monetary policy. The result was the survey’s only question that produced a tie: 10 executives saying due to fundamentals compared to 10 saying Fed policy essentially set-up various assets for price apprecia-
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tion. Q42 asked respondents to rank their confidence in the Fed’s ability to accelerate economic growth and stimulate employment. Executives collectively gave the Fed a 4.6 on the 10-point scale. Interestingly, there were no nines or 10s and only two eights among the responses. Nearly half, 11 of 24, put their level of confidence in the Fed at a four or less. So, in sum, the narrative above is what we learned about the opinions, ideas, attitudes and expectations of 25 senior mortgage banking executives on 42 key industry issues and topics. If you care to go through the questionnaire for yourself, go to www.capmkts.org and click on the link to view the full survey. Tom LaMalfa is a 34-year veteran mortgage-market analyst and researcher. He has done pioneering work in the areas of secondary markets, wholesale mortgage banking, mortgage brokerages, financial benchmarking and GSE reform. Tom continues since 1977 to co-author an old-fashioned mail newsletter, The Holm Mortgage Finance Report. In the aftermath of the financial crisis, his focus is on Washington, D.C. and the regulatory burden it is imposing on consumers and lenders. His 21-year old research firm, TSl Consulting, does survey research. He may be reached by email at tom.lamalfa@gmail.com.
Jonathan Foxx is president and managing director of Lenders Compliance Group and Brokers Compliance Group, mortgage risk management firms devoted to providing regulatory compliance advice and counsel to the mortgage industry. He may be contacted at (516) 442-3456, by e-mail at jfoxx@lenderscompliancegroup.com, or visit www.LendersComplianceGroup.com or www:BrokersComplianceGroup.com.
Footnotes 1—For instance, see Foxx, Jonathan, Anti-Money Laundering Program: Preparation is Protection, National Mortgage Professional Magazine, August 2012, Volume 4, Issue 8, pp. 22-34. 2—Foxx, Jonathan, Policy, Procedures, and Examination - Part I: Mortgage Brokers, National Mortgage Professional Magazine, March 2013, Volume 5, Issue 3, pp. 8-32. 3—I will not treat important areas of preparation, such as readiness for Community Reinvestment Act (CRA), tie-in restrictions, insider lending, and other compliance areas, if the mortgage banker is affiliated with a depository institution. 4—Portions of this table are adapted from Pannabecker, James H., Mortgage Lending Compliance (With Federal and State Guidance), Volume I, Second Edition, xv-xvi, A. S. Pratt, 2012. 5—The table is based on legal and regulatory compliance requirements as of February 28, 2013. 6—For instance, see CFPB Statement of Intent for Sharing Information With State Banking and Financial Services Regulators, Dec. 6, 2012; 2013 CFPB-State Supervisory Coordination Framework, May 7, 2013; Memorandum of Understanding between the Consumer Financial Protection Bureau and the United States Department of Justice Regarding Fair Lending Coordination, December 2012; Memorandum of Understanding between the Consumer Financial Protection Bureau, the Conference of State Bank Supervisors, and the Other Signatories Hereto, On the Sharing of Information for Consumer Protection Purposes, January 2011. 7—Section IV.B, Memorandum of Understanding between the Consumer Financial Protection Bureau, the Conference of State Bank Supervisors, and the Other Signatories Hereto, On the Sharing of Information for Consumer Protection Purposes, January 2011.
n Pennsylvania Mortgage Professional Magazine n JULY 2013
Finally, management should monitor all aspects of the loan flow process, in order to identify, mitigate, reduce, or eliminate risk. To a considerable extent, training plays an important role in risk management, but the monitoring must go beyond training employees. When exposure to risk is identified, management should document that event and implement corrective actions. For the most part, whatever defect or deficiency has been cited, an Examiner may understand a mortgage banker’s actions in affirmatively endeavoring to prevent any continuation of a defect trend or deficiency practice. However, the one thing that no banking department will tolerate is a deficiency that, once discovered, remains irresolutely unresolved.
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