Title Industry, Lenders Urged to Partner in Overcoming Regulatory Hurdles
|June 13, 2013
Speaking during October Research’s National Settlement Services Summit on June 11 in Cleveland, the vice chairman of the Mortgage Bankers Association (MBA) addressed the many challenges title companies and mortgage lenders face due to new regulations required by the Dodd-Frank Act.
Bill Cosgrove, president and chief executive officer of Ohio-based Union National Mortgage Co., urged title professionals to work with the MBA to find solutions to meet new or soon-to-be-implemented regulations.
- Click here to listen to a segment of Cosgrove’s speech.
Among the new or pending regulations include the Qualified Mortgage, Qualified Residential Mortgage, the Consumer Financial Protection Bureau’s proposed mortgage disclosures that will replace the current GFE and HUD-1.
Cosgrove shared the MBA’s vision for a new primary and secondary mortgage market structure to replace Freddie Mac and Fannie Mae.
“We must have a clear path to transition to a new secondary market structure,” he said. “We don’t want to wait for a plan. When you wait for a plan from Congress, you get things like the Dodd-Frank Act. We’ve seen the results of their ideas of how to regulate us.”
Cosgrove called 2013 the year of implementation, but warned that we are only in the first couple of innings in adopting new regulations.
“The amazing thing is that the rules of Dodd-Frank that came out in 2010, the implementation of Dodd-Frank doesn’t happen until January of next year,” he said. “Dodd-Frank hasn’t even hit the shores yet. That should be something that all of us in the industry have got to deal with. Changes of this magnitude require your involvement.”
Cosgrove encouraged title professionals to get involved with ALTA, state land title associations and the MBA. As an example of the title industry working with the MBA, last week ALTA held a roundtable discussion with the MBA on industry Best Practices, vendor management and ways to reduce risk in the transaction.
The roundtable brought together members of ALTA’s Best Practices Task Force and representatives from both national and regional lenders for a day of great discussion about whether the Best Practices could fit lenders’ needs as they work to set up their risk management and vendor management programs. In addition, the conversation covered lenders’ relationships with settlement agents and how they can assist with consumer protection.
“The lenders confirmed that the Best Practices covered the issues that most concerned them,” said Michelle Korsmo, ALTA’s chief executive officer. “In some instances, the lenders stated that they would like more detail, but overall, they were happy with the breadth and scope of the Best Practices.”
Beyond providing feedback on the usefulness of the Best Practices, the roundtable also provided a good discussion on ALTA’s proposed assessment and certification program. Korsmo said lenders want the assessment to provide consistent results and sufficient detail so that it’s trustworthy and they can draw appropriate conclusions.
“The lenders were also quite candid about wanting a tiered program because they do not want to put small providers out of business,” Korsmo added.
A follow up meeting will be held with more lenders once more details of the assessment program are ready. ALTA’s Internal Auditing Committee is working on a draft of the proposed assessment program for the Best Practices Task Force and the Board of Governors to consider.
During his presentation, Cosgrove said industry partners are in an extraordinary position because of significant role the housing plays in the economic health of the country.
“Home sales continue on an upward trend and purchase applications are showing year-to-year growth,” he said. “With the positive growth in the market place, it’s now the time for all of us—industry leaders, policymakers, consumer advocates—to come together and find a solution that supports a vibrant housing system.”