Compliance is always a major concern in mortgage lending and, in times like these it can be perceived as a moving target. A recent survey of the mortgage industry by Wolters Kluwer found that a cross section of mortgage executives were unsure of just how compliant their organizations are in 2023. It should be noted that the majority of participants surveyed, held a number of different positions in senior management, production and operations, and weren’t necessarily responsible for compliance or legal oversight.
The survey, conducted in Q1 2023, asked 122 mortgage lending executives their opinion on whether their companies were fully compliant in a number of areas.
The majority are concerned about being in compliance
Only 15% of respondents believe they are in compliance for 2023, with 85% saying they believe they are either not in compliance or are unsure whether they are in compliance this year. Among the 85%, almost a quarter (24%) say document filing requirements are the biggest concern, followed by post-closing document management at 21%, compliance document generation at 20%, loan origination at 14% and closing process at 7%.
In a previous survey, six out of 10 respondents said they believe they are either not in compliance or are unsure if they are in compliance for 2023 regulations. When respondents were asked why that might be the case, 38% said they believe it’s because they are not properly leveraging the tools that they have, and over a third (36%) of respondents believe it’s because it’s too difficult to keep up with regulations.
Lenders recognize they need updated tools and processes to address multiple regulatory concerns.
When asked what they need to accomplish or solve for in order to get in compliance in 2023, almost 40% believe they need to have updated processes and almost a third (32%) of respondents said they need new tools. Just under 14% said that staff training will bring them into compliance this year.
Among the primary areas of compliance regulations, they are most concerned about for 2023, almost 60% selected lien releases and county recording regulations as their top choice, and almost 50% listed these areas as a concern: CRA, fair lending, HMDA reporting and RESPA reporting. Less than 10% were concerned about TRID regulations.
Many lenders are unsure about compliance with their digital tools.
Almost a third of respondents believe that new digital lending tools they’ve adopted over the last several years are helping them to be compliant. However, 70% say they are either unsure or worried about the compliance of their current digital tools.
Among respondents who believe their digital tools are compliant, a majority (63%) said they are confident in their remote notary digital tools, 48% are confident with eSignature, 44% are confident in their eVaults, and 30% believe their digital closing tools are compliant.
The survey was conducted across a wide range of lenders, including mortgage banks and financial institutions and did not explore which compliance providers and solutions the lenders were using.
As a leading provider of compliance solutions to the mortgage and banking industries, Wolters Kluwer conducted this survey to identify broad market sentiment on compliance. At the end of the day, compliance, at most institutions, is the purview of compliance officers, general counsels, and outside counsel. Had this survey been focused exclusively on these subject matter experts, or Wolters Kluwer clients, the overall results would most likely have produced more positive and confident responses.
At Wolters Kluwer, our priority is our client’s compliance. To gain confidence in your compliance or for more information about Wolters Kluwer’s digital solutions [connect with an expert today].
