The consumer was not under investigation and was not the subject of a complaint, but was rather a consumer who became aware that their mortgage loan file from a year prior had been selected with hundreds of other loan files for a routine compliance audit. The consumer objected to their personal information—including bank statements—being released, but the government denied the request and required the mortgage company to comply and turn them over anyway, along with the bank statements and other private information of every consumer. Thousands of loan files are reviewed daily by state regulatory agencies, and daily, thousands of consumers are completely blind to the fact that their per-
sonal information is being reviewed by government employees and where that information might end up. Is the information forwarded to other agencies, such as the IRS? Is consumer information safely destroyed, or is it subject to theft, either in hard copy form or digitally by a computer hacker? While all of the new regulations, government agencies, and host of other changes in the mortgage industry in recent years are debatable as to their
effectiveness and overall good, it is without doubt that consumers would benefit from and most definitely want to know that the government can and is looking into their personal information. It is time for consumer protection, time for the CFPB and every state regulatory agency to require disclosure and consent from consumers when they apply for a mortgage loan regarding what information may be given to regulators. Consumers have the right to
know what documents or information will be turned over, what agencies may have access to the information, when such information is given to auditors, and the ability to opt out. Consumers deserve the right to choose whether their loan file may be audited without subpoena by a government agency and have the ability to freely enter into a private transaction with a lender without the fear of Big Brother spying. Mark Buskuhl is COO of Southwest Funding LP and has more than 12 years of experience building and managing mortgage banking companies. He may be reached by phone at (214) 221-5215 or e-mail mbuskuhl@southwestfunding.com.
37
n South Carolina Mortgage Professional Magazine n MAY 2014
“We cannot provided you with a ‘copy of any disclosure, agreement, notice, consent, or otherwise’ which was given to have your information released to the Department because no such document exists.”
“Regulations are a moving target the industry and even regulators both struggle to interpret and understand.”
NationalMortgageProfessional.com
around disclosure after disclosure after disclosure. Regulations today seek to inform the consumer about everything backwards and forwards regarding their mortgage loan. Consumers are told whether the mortgage broker or lender has any affiliated businesses, whether their loan will be serviced or sold, and much more. Page after page after page require notice and consent with a signature by the consumer. What is omitted from every one of these disclosures is what may happen to the consumer’s personal and private information as it relates to the government. The government very likely will look at it—at any time and for any reason. How many consumers are aware of this? My bet is almost none. Why does the government make it a secret that consumer confidential information may be given to government auditors? Is big brother spying on consumers and they don’t want to make everyone aware? Did they simply forget during the recent year’s new rule-making sessions to add this particular disclosure? The Fourth Amendment to the United States Constitution guarantees “the right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” In short, Americans have a right to privacy which cannot be infringed upon without cause. What happened to the Fourth Amendment and right to privacy? It has been largely ignored by mortgage regulatory agencies. There is no subpoena, no probable cause, and no reason for someone’s personal information to be seized and reviewed by the government. In a March 2014 letter from a certain state mortgage and financial regulatory agency, the state wrote in response to a consumer’s request: