Last week, I had the privilege of sitting down with a group of mortgage industry professionals (bankers, title companies and appraisers), Jack Hopkins (a CFPB Community Bank Advisory Committee representative), and CFPB Director Richard Cordray. CorTrust Bank hosted the meeting in Sioux Falls, SD, which provided an opportunity for key players in the mortgage industry to provide feedback to the ongoing mortgage reform. Specifically, what’s working well and what’s not working very well. Even thought we only had about an hour, we managed to get in some good discussion. Here are a few of my takeaways from the meeting:
- The CFPB has real concerns about both the availability and the challenges of mortgage loans in rural areas. The availability of appraisers and acceptable appraisals are a primary area of concern for the industry.
- The CFPB understands the industry concerns with respect to informal guidance and the lack of written answers to questions. Unfortunately, there are no plans to change this approach. Director Cordray cited potential legal risks when addressing this concern.
- The CFPB is trying to do what they think is best for both the consumer and the mortgage industry. Regardless of what some may think, they are not turning a blind eye to the mortgage industry and the players within.
- Title companies are frustrated with banks and banks are frustrated with title companies (as well as other third party settlement service providers). Director Cordray reminded the group that at the end of the day the bank is ultimately responsible for compliance. The title company should do what the bank asks and if the bank instructs them incorrectly, liability falls to the bank.
- While the lender’s and owner’s title insurance calculations are a big headache, there isn’t a simple fix. The CFPB is very aware of the issues caused by the required TRID calculation and will continue their research. Unfortunately, the August 2016 TRID proposal does not offer any changes or relief.
While we barely scratched the surface with respect to what’s working and what isn’t, I truly appreciated the opportunity to provide feedback to the CFPB. I want to thank CorTrust Bank for allowing me a seat at the table and the CFPB and Director Cordray for taking time to listen.