TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/172962
Feature For institutions already struggling to juggle varying state requirements, a new set of federal rules may come as another headache. Tech Tylenol for Legislative Compliance Woes Finding the right technology for legislative compliance can help remedy any compliance headache. By Tory Barringer T o a person with the right set of tools, a problem is just an opportunity in disguise. That's why it's no surprise—as more and more guidelines come down from federal regulatory agencies—that mortgage servicers, lenders, and other professionals are expanding their toolboxes by turning to technology providers for their compliance needs. As January 10—the effective date for many of the Consumer Financial Protection Bureau's (CFPB) new rules—approaches, mortgage and tech firms alike find themselves forced to adapt or fall by the wayside. Which Issues Are Most Important? I f you asked that question to 10 different technology providers, you'd likely get 10 different answers, all depending on which services each offers. The common theme is the sheer amount of changes on the horizon—ranging from qualified mortgage (QM) guidelines to servicing criteria to loan officer compensation—and the confusion they bring. "[Clients] know there are a lot of changes, [and] they know those changes are complex and interdependent. And they express concern about not feeling like they have a full understanding of everything that's in all of those rules and concern that they missed something somehow or don't understand something fully," said Laurie Spira, chief compliance officer at document and compliance solutions firm DocMagic. "It's more of a general concern: 'In addition to these 83 things I've asked you about, what's out there that I don't know about?'" At the root of these issues is the CFPB, the agency established by Dodd-Frank and championed by advocates as a "cop on the beat" for the consumer financial markets. The bureau has been something of a mixed blessing (though some may argue violently against the word blessing as a descriptor)— while it's less confusing to have a single source behind most of today's rulemaking, it's also made it possible for the government to issue sweeping changes, as we've seen so far this year. "In the past, there hadn't been a whole lot of changes on the federal side," explained Richard Triplett, VP and director of compliance for AllRegs, an information provider and reference library for the mortgage industry. "So you didn't have every rule that applies to mortgage lending being changed at the same time." Naturally, the "one size fits all" approach throws a wrench into the works of compliance professionals, who in the past have put most of their focus on regulations at the state level. For institutions already struggling to juggle varying state requirements, a new set of federal rules may come as another headache. "The big problem is you've got the federal guidelines and state guidelines not lining up. The federal supersedes state, and you're trying to adapt to both, and they're conflicting with each other," said Robyn Arreola, chief business strategist for the Walz Group, a firm specializing in communications between servicers and borrowers. For most servicers, Arreola said, just staying in the loop is the biggest hurdle of all. The M Report | 27