They recently issued their Summer version of their Supervisory Highlights providing information on audits performed between January and April of 2015. The effect is quite different; CFPB’s report is sobering, while the beer on the other hand…you get the picture.
This seasonal CFPB report highlights, among other things, certain violations in mortgage originations. CFPB finished its first round of supervisory audits of loan originators under the Dodd-Frank rules. The main findings are:
- Failing to establish and maintain written policies and procedures on LO compensation
- Failure to comply with RESPA for adequate disclosure of the Homeownership Counseling Organizations
- Not complying with all Regulation X GFE requirements
- Failure to fully comply with Regulation X HUD completion requirements.
- Deceptive practice related to overly broad releases in HELOC agreements.
You can review the specifics of each of these findings, along with the details on findings in other areas audited, in the CFPB Supervisory Highlights Summer Edition (Highlights). I recommend you do so.
This report provides additional information about each finding with some suggestions and direction from CFPB toward correction.
These seasonal audit highlights can provide lenders with a heads up on areas, processes and procedures which may need attention. Lenders can use these to be proactive in reviewing their processes, procedures and policies to ensure compliance and correct problems before they are uncovered in a CFPB audit. This is where a strong pre and post-closing audit function can benefit.
By reviewing loans early and often, lenders can identify the areas needing correction and improvement. This helps prepare for a more positive regulatory or state audit while reducing loan defects. And we all should know by now the benefits of reduced loan defects.
Enjoy your seasonal selections…