While mortgage compliance companies are always there to handle the complexities involved in mortgage compliance, still lending institutions have to be aware of the concerns related to regulatory compliance and risk management. Cyber securities, HDMA rules and credit and compliance risks are the top concerns.
Following are the top mortgage compliance challenges for mortgage lenders:
- Compliance program management
- Deposit account regulations
- Complying with upcoming changes in regulations
- Managing, implementing and monitoring residential mortgage regulations
When it comes to the implementation of compliance programs, mortgage lenders are facing challenges because they have to rely on manual compliance processes. Keep in mind that not all lenders work with companies offering mortgage compliance services. This concern is raised by 47% of lenders responding to a study. 46% of the lenders responding to the survey reported that they make little to no investment when it comes to automating compliance.
Not having adequate staffing also makes it difficult for mortgage lenders. This concern of inadequate staffing is reported by 45% of the respondents. 44% of the lenders reported that they have too many other business priorities.
Only 16% of the lending institutions reported that they are using an integrated and strategic risk management system in all departments. 30% of the respondents admitted that they lack a risk management system. They also have some serious concerns with certain HMDA reporting aspects. However, at the same time, they are comfortable with other aspects. For example, their concerns related to capturing data fields and upgrading systems are declining.
However, they are increasingly concerned about training staff and collecting and analyzing new data. As the data submission process is expanded, reporting is also becoming more challenging. The percentage of lenders raising this concern has increased from 15% to 40% over a span of a year.
Cybersecurity is still the top concern. 78% of lenders report it is a top risk. Addressing it is the top priority. From 34% to 45% of respondents are going to give more attention to credit risk over the coming years. From 33% to 47% lenders are going to give more attention to regulatory/mortgage compliance risk.
They want to be able to:
- Ensure compliance
- Track changes in regulation
- Demonstrate compliance
The following concerns with compliance are declining among lenders working with companies providing mortgage compliance services:
- Staying compliant
- Tracking changes in regulations
- Complying with changing regulations
- Illustrating compliance
- Managing risks
However, not all lenders are working with mortgage compliance companies. So for them, these areas still carry a high level of concern.
There are some economic factors as well such as interest rate fluctuation, data privacy and recession. The percentage of lenders concerned about these three factors are 87%, 85% and 76% respectively. Many lenders are not expecting regulatory relief in the near future.
So, working with mortgage compliance companies is in their best interests. As a lender, you cannot keep a number of balls in the air. Keeping up with changing regulations and at the same time, staying compliant is not a cakewalk. These companies have knowledgeable individuals who handle mortgage compliance, regulatory monitoring and other complex things on a regular basis. They keep up with the changing regulations and notify their clients (mortgage lenders). These companies can help you with services such as mortgage document services, mortgage compliance services including templates, regulatory monitoring, custom research & consulting, due diligence and settlement services.
So, let a mortgage company handle this so that you can focus on the core goals of your business.