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Mortgage Lending
Compliance
A home mortgage is typically a consumer's largest financial transaction. The critical nature of mortgage lending to consumers has resulted in the industry being made subject to a large body of regulation at the federal, state, and even local (e.g. Chicago, Cleveland) levels. In addition to several federal regulations listed above (Regulations B, C, Z), federal mortgage lending regulations include the following:
- Real Estate Settlement Procedures Act
- Flood Disaster Protection Act and the National Flood Insurance Act
- Fair Credit Reporting Act
- Community Reinvestment Act (Regulation BB)
In addition to federal regulation, non-bank mortgage lenders (mortgage bankers, mortgage brokers) are subject to state regulations that can vary widely by state, type of loan (e.g. first lien or second lien), and type of lender.
The mortgage industry is currently under a significant amount of stress. Lending volumes are down drastically from the record volumes of recent years. In particular, many of the subprime lenders that enjoyed great returns in recent years have gone bankrupt with the collapse of this market as many of the risky / low grade loans defaulted. In addition, many states have passed anti-predatory lending bills, for which most of the regulatory burden falls on subprime lenders. The financial institutions that have acquired these mortgages by law have assumed the risk of compliance. Many organizations such as Industrial Loan Companies (ILCs) are not adequately aware of the risk they are facing with this assumption of responsibilities for the loan portfolios that they have purchased. There will be excellent opportunities to provide these organizations with effective "portfolio reviews" to assure these loans do not expose the organizations to significant non-compliance risk.
Other Mortgage Services
CrossCheck provides a variety of compliance and due diligence services to banks and other mortgage lenders.
- Full due diligence underwriting
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- Credit, compliance, and fraud reviews
- Warehouse line consulting/audits
- Compliance reviews
- Mortgage operations reviews
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- Distressed asset reviews
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- Forensic due diligence
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- Repurchase reviews/demands and counterparty workout strategies
- Loss mitigation strategies
- Quality control audits
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- Portfolio assessment
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