Geocoding loans has become a fairly routine process in mortgage lending. It’s easy to type a single address into a government website and obtain a state code, county code, MSA/MD code and census tract code. Geocoding information is critical to report for the Home Mortgage Disclosure Act (HMDA) and the Community Reinvestment Act (CRA). Geocoding also allows lenders to determine if a loan is located in a low- to moderate-income tract, which can enable originators to ask for higher premium pricing when selling their loans on the secondary market. In addition, geocoding can provide a host of other useful demographic information. However, there are limitations to some geocoding systems, many of which can slow your operations and cause accuracy issues.

Over the last couple of years, most enforcement actions by the Bureau have not focused on mortgage originators. However, on June 5th, the CFPB levied a $1.75 million fine against one of the largest mortgage lenders in the country for HMDA violations. This is the exact amount that the CFPB fined Nationstar in 2017 for its HMDA violations — which was the largest HMDA fine ever issued by the CFPB at the time.

The Office of the Comptroller of the Currency (OCC) recently published its Semiannual Risk Perspective for Spring 2019, which provides a detailed analysis of the federal banking system and key risks facing banks. Overall, the OCC reported that the banking system is stable. However, some banks have increased their risk from previous years.

When Unfair, Deceptive, or Abusive Acts and Practices (UDAAP) first became effective after Dodd-Frank, there were many enforcement actions taken against prominent financial institutions, most notably in 2017. However, the regulation has long been criticized for being too open to interpretation.

HMDA data provides significant insight into your competition. With 85 public data fields, institutions can better understand their competition overall and evaluate individual competitor’s lending practices to identify potential opportunities. Dive into the data and discover . . .

The TILA-RESPA Integrated Disclosure, rule known as TRID, was created to better inform borrowers about mortgage costs before their closing date. The rule requires timely and accurate delivery of the Loan Estimate (LE) and Closing Disclosure (CD) forms to borrowers, which helps to highlight the differences between the estimated and closing amounts. The initial implementation of the rule required vendors to make significant changes to their systems and continues to challenge some lenders due to the technical nature of the rule. Recently, the Federal Reserve published its observations of common TRID violations it has found in its latest Consumer Compliance Outlook document.

Unfortunately, fraud continues to grow in the mortgage industry year over year. While we've already covered 5 common types of mortgage fraud schemes, one type continues to grow in the number of occurrences: Wire fraud is estimated to cost $30 to $50 billion annually (Source) and its complexity continues to make it difficult to curtail.

2019 was the year all lenders finally got to experience the pleasure of submitting all the new data points required under the CFPB's expanded HMDA data collection and reporting requirements. This process was not without incident, but the lessons learned this year will help lenders better prepare for next year.

On February 5th, thirteen Democratic Senators introduced a bill to reinstate the Dodd-Frank reporting requirements that were rolled back by the Economic Growth, Regulatory Relief, and Consumer Protection Act—also known as S.2155. Most notably, this new bill would require banks or credit unions that make more than 25 mortgage loans a year or 100 home equity lines of credit to report detailed loan characteristics that they were previously exempt from reporting, such as interest rates, points, and fees, loan terms as well as borrower characteristics like credit score and ethnicity. The bill would also require banks and credit unions to report a unique loan identifier on all loans.

As internet connectivity reaches all-time highs and 5G networks are becoming a reality, it is no surprise that businesses in every industry are adopting new technologies to stay ahead of the game. This digital disruption even affects mortgage lending and compliance. From more agile loan origination systems, to speedier and more effective compliance software, technology is helping borrowers and lenders rapidly reduce their loan closing times.