Lender Profits Falling, CFPB Sets Q&A Date

The new regulatory environment has been a growing concern among mortgage, finance, and housing professionals. In congressional testimony on March 16th, the Consumer Financial Protection Bureau Director Richard Cordray promised a question-and-answer session to help industry professionals comply with TRID. Cordray also reiterated that the CFPB’s TRID enforcement has remained “corrective and diagnostic” for mortgage lenders making good-faith efforts to comply.

But for many mortgage professionals, the problem isn’t CFPB enforcement—it’s decreasing volume and increasing costs.

Mortgage lenders saw a dramatic drop in production profitability during the fourth quarter of 2015, and the Truth-in-Lending disclosure (TRID) rules appear to be the culprit. The Mortgage Bankers Association recently conducted a survey of mortgage banks and found that mortgage lenders averaged just $493 in profit per loan in the fourth quarter—down 60% from the $1,238 average the quarter before. Mortgage bankers saw the average production expenses (including compensation, commission, occupancy, and corporate allocations) rise from $7,080 per loan in the third quarter to $7,747 in the fourth quarter—the highest average since 2008.

Both sides of the aisle in Congress are putting pressure on the CFPB to ease up regulations and create exemptions for credit unions and community lenders. On March 18th, the National Association of Federal Credit Unions started a petition demanding that Cordray exempt credit unions from certain rulings.

Lakeside Title Company: a Leader in Title Insurance

Lakeside Title Company is a Columbia, Maryland title insurance company that serves builders, lenders, and realtors in Maryland, Washington D.C., Northern Virginia, and Southern Pennsylvania. We close over 4,000 transactions a year from 14 different locations. For more information on title insurance, title searches, and closing services, please visit our homepage.

If you, a colleague, coworker, client, friend, or family member have questions for an attorney, click here to contact  Lakeside Title Company’s affiliated Law Firm, Deardorff, Rath & Pichon, LLC.

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