The housing market collapse was a major wake-up call regulators, legislators and the mortgage industry. In an effort to prevent such an event in the future, new lending regulations have been put in place.
However, the changes has a number of financial institutions questioning what this means for the future of compliance. A panel of mortgage professionals recently discussed this issue during the REperform Summit held by HousingWire.
"What has changed is the system is a lot less forgiving," said Gagan Sharma, president of BSI Financial.
However, human error is a major part of the business world and is largely unavoidable in many cases, Sharma added. In an effort to curb this issue, lenders should utilize technological solutions, implement their own quality control provisions and keep an open line of communication with mortgage professionals on the frontlines of the industry.
Meanwhile, LenderLive president of loan servicing Dave Vida said a number of lenders have hired teams of professionals to ensure the companies are keeping up with changing compliance rules and regulations.
While these measures may be more costly and time-consuming than past efforts, they could prevent borrowers from acquiring mortgages they can't realistically afford.