According to a statement made on Monday, by the Consumer Financial Protection Bureau (CFPB), a large number of mortgage lenders are now following the new regulations implemented last year by the Dodd-Frank Act. These new regulations govern mortgage originations and the dispersal of information to borrowers, among other things. Other rules apply to a borrower’s ability to pay their monthly mortgage payment.
According to Assistant Director of Supervision Policy, Peggy Twohig, most banks and nonbanks are following the new regulations and have set up compliance systems. There were a few exceptions, but the CFPB did not find any lender engaging in deceptive or unfair activities in relation to loan originations.
The CFPB examined several different lenders for compliance systems. These systems check the mortgage process, ensuring that there are no unfair practices or other issues. If they are issues, the system should outline what action must be taken to correct them.
The new rules seem to be working as designed, with the result that more people are now able to become homeowners. Some lenders, though, believe that further clarification is required. This is especially the case from organizations such as the Department of Housing and Urban Development. According to MBA President, David Stevens, without more clarification about HUD’s standards on underwriting, lenders may be fined by the Federal Housing Administration for violating the False Claims Act.