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Articles by Tyna-Minet Anderson
How Burnett v. NAR Will Impact The Mortgage Industry
NAR is the largest lobbyist group in the world. In every mortgage continuing education class I have attended, mortgage professionals have questioned why agents receive more favorable treatment or exclusions from rules. Perhaps because of this feeling of unfairness, many of those mortgage professionals silently cheered when they initially heard about the ruling, not realizing this may negatively affect them as much as the agents.
The ‘Science’ Of Appraisals Gets Government Attention
For the last year, government entities including the Consumer Financial Protection Bureau (CFPB), U.S. Department of Housing and Urban Development (HUD), and the White House have talked about inaccurate appraisals. On June 1, 2021 President Biden announced the Interagency Task Force on Property Appraisal and Valuation Equity (PAVE). On Oct. 6, 2022, CFPB published an announcement to let borrowers know they can challenge inaccurate appraisals through a reconsideration of value process.
On The Brink Of A Regulatory Crackdown
Interest rate hikes take time to work through the economy. Since the Fed started raising the rate last year, we have seen a massive decrease in mortgage business and major banks fall. We don’t know yet what other parts of the economy could fall under the strain of the higher rates, but it’s likely to come with some additional regulation. The IRS received $80 billion in funding, a majority of which is set to go towards auditing companies.
Competition Heats Up As Non-competes May Soon Be Banned!
Mortgage loan originators by nature are forward-thinking professionals always looking for new opportunities to improve their business. With a minor exception, MLOs are only allowed to be sponsored by one company at a time, which limits the extent of their independence. As a result, many MLOs have signed employment agreements that include non-competition or other clauses written to protect their sponsors.
Working To Change The Upper Levels Of Business
What is your opinion about mentors and how do you recommend finding one? TM: I think having mentors is an incredibly important facet of a successful career. For young women coming into our industry — one that has been largely paternal for generations — having someone you can trust to advise and guide you is critical. Finding the right mentor starts with finding a strong connection. Attending networking events and meeting new industry peers is key.
FICO Increases 400% For Tier 3 Lenders
As lenders reached the final stretch of a very challenging 2022, they were met with the news of yet another obstacle. One that adds an additional layer of financial strain to an already struggling industry. Obviously, any financial increase for our industry adversely impacts the American homebuyer. Especially when there is very little to zero margin that allows the lenders to absorb the increase. As most everyone knows at this point, FICO has increased their fees by 400% for Tier 3 Lenders.
Complex Algorithms Causing Complex Compliance Issues
Algorithms are part of our everyday life. For example, when you Google a question, it is an algorithm that brings up the most popular sites. Using a proprietary computation, Google ranks the websites based upon the number of keywords or combination of words and the relevance to the question being asked. Then Google provides the top results and ranks them based on the user’s profile. This is a great example of a “complex algorithm” because the results can be different for every user.
The State Of Remote Work In Mortgage
State regulators are starting to catch up to how the industry has been conducting business. With new regulations already in place and more on the horizon, we must be prepared for a new season of regulatory compliance. The COVID-19 pandemic taught us many things, but one of the main lessons learned is that our employees not only can work from home, but many are thriving while providing companies with additional nationwide resources.
Strength In Numbers
Finally, I thought, this is my chance to get some answers. I presented the general topics I had questions about, but I also asked Audrey and Kevin to address the silence from the bureau. A couple of weeks later, I received a single sentence follow-up to my inquiry asking to set up a call with a gentleman named Mark. This call was definitely different from the CFPB calls of the original Richard Cordray days.
The Perils Of Lock And Shop
If rates happen to go down during the shopping period, the borrower is often allowed to decrease the rate one time. It seems like the perfect solution for a tumultuous market. Most programs charge an upfront lock-in fee at the time of the lock. It may be a flat dollar amount or a percent of the loan amount. The mortgage application process typically begins after the borrower has found a property, not when locking in an interest rate with a creditor.
A UDAAP Expansion
It’s a consumer review world More than ever, today’s consumers turn to online reviews to help them make decisions related to where and how to spend their hard-earned money. The Consumer Financial Protection Bureau (CFPB) has taken notice. On March 22, 2022, the CFPB released Bulletin 2022-05 which outlines ways in which mortgage companies may be in violation of Unfair and Deceptive Acts or Practices (“UDAP”) related to consumer reviews.
Experian Boost … Or Bust?
In a recent CE class, I asked if students had seen success from Experian’s 2019 Boost program. According to Experian, the program can instantly boost consumers’ credit scores by allowing them to add their cell phone, utility, or video-streaming bill payments directly to their Experian credit report. They claim that consumers’ credit scores will be boosted immediately if they have been making qualified on-time payments. The average Boost user will see their score rise by 13 points.
The Housing Market Is In trouble
We are in the process of hiring a new director for our company. He will be moving to Utah from out of state. With his six-figure salary he qualified for more than half a million-dollar loan. Four years ago, I bought a 4,600-square-foot house on a full acre within 10 minutes of our office within his price range.
Compliance in 2022
As non-depository mortgage companies close most mortgage loans in the country, it is safe to say that they are becoming the focus of the regulatory authorities’ enforcement efforts. The aggressive and coordinated multi-agency examinations and enforcement actions will likely affect these small businesses as they brace for impact and fallout from this newly increased scrutiny.
The Compliance Contradiction
Halfway through my first-semester law school finals, I began to realize that no correct answers existed in the law. For months, I had been annoyed with professors who answered, “it depends,” to every question asked. I did not understand why my property law professor said that 38 states had determined the law on a subject, and then he claimed that the opposite was true in Hawaii.
Get Ready To Duck And Cover
A more “aggressive” CFPB is not just something that compliance professionals are warning about -- it is a term that the Consumer Financial Protection Bureau has started to use on a regular basis to describe its own actions. If that wasn’t enough of a red flag that regulators are ramping up, states are creating their own mini-CFPBs to become the enforcers for local consumers’ rights. Without question, it’s time for mortgage professionals to step up their compliance game again.
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