Several studies have shown that, since the financial crisis and the subsequent creation of several regulatory agencies and regulations, banks and mortgage lenders have had to spend more time and resources on compliance and quality control. For example, between 2010 and 2017, the number of pages of regulations doubled, and actual expenses increased by over $50B according to one estimate (See tables below from Rice University’s Cost of Compliance with the Dodd-Frank Act, 2019)
With updated regulations and the GSEs, OCC, CFPB becoming increasingly active, loan quality and compliance is being scrutinized at every level.
This requires mortgage lenders to rethink the whole QC process. It cannot just be after-the-fact and address transactional/ tactical checks. An efficient QC process must focus on process improvements, quicker defect identification and longer-term defect fixing. Today’s loans must be done right and scrutinized throughout the entire production process. But that seems like a lot of cost and effort added on to the process. That may not be true, if the correct approach is used and some innovative ideas are implemented, as we see in this Ebook. Click here to read ebook.