mortgage broker compliance
After attending the MBA’s regulatory compliance conference, one thing that was very clear is that mortgage brokers out there are worried. This worry does not just stem from the inevitable fact that YSP as a form of compensation is going the way of the dinosaurs, but also from mounting compliance costs. Everyone knows that to make money one must make more than they spend, but currently, the sheer amount of compliance costs have the brokers on edge. From referring to lawyers, and retraining staff, and losing productivity during that training time, margins have began to shrink and there is no telling how much more they will in the future.
Brokers are also a little upset about what they would consider a mess they were left with. Most of the brokerages who are still in existence are commonly the ones that were not necessarily originating all of the “exotic” mortgages. In their eyes they were providing a good service to borrowers and as a result of originating good loans they were provided access to more lenders. Now, they face even stricter scruitny, high compliance and training costs, and worries about the new yet ominous CFPB.
All in all, brokers understand that they are at the beginning of a new era, and they also understand that the mortgage industry is undergoing some greater changes to regain the public’s trust. One thing they do want to know though, is how exactly are they going to survive if the regulatory atmosphere continues in this quick-fire manner.