Regulation aims to keep things on the right level in any industry. However, there are policies and rules that are inevitably met with skepticisms and criticisms upon introduction, particularly when they have an adverse effect to a group of stakeholders.
But while most changes brought about by a regulatory body are deemed negative, there are those that are actually paving way to a more innovative and promising future. This is what Faith Schwartz, Corelogic's Senior Vice President, Government Affairs, believes, which comes with the implementation of the Consumer Financial Protection Bureau's (CFPB) Know Before You Owe or TRID rule.
As per Mortgage News Daily report, Schwartz wrote in the company's Insight blog, "not all the changes that regulators have wrought have been negative. In fact, some might be setting the stage for future innovation."
Below are few innovations that the mortgage industry is hoped to achieved in the coming years:
E-closings realization
With e-closings, the process of closing real estate deals would become simpler and faster. This has been an item in the industry for years and with the CFPB now conducting a pilot study, e-closing might come into realization sooner than later. The CFPB's study aims to show what value real estate industry players, especially customers, can get through paperless closing.
Increased mortgage lending transparency
A new Home Mortgage Disclosure Act (HMDA) aims to give better understanding of the market, but is said to have been giving lenders some headache.
Richard Cordray, CFPB Director, as per DS News said, "With today's request for information we are seeking feedback from stakeholders on how best to ensure the accuracy and reliability of mortgage lending information."
Schwartz believes that in the long run, increased transparency in mortgage lending information is positive for both investors and consumers and they will eventually "find a cadence with this new reporting requirement and readjust for a new approach to lending reporting standards."
Common securitization platform
A new common securitization platform is expected to be released this year and once ready, Schwartz says the agency market would benefit through support and enhancement. It will also bring a new single GSE security into a possibility.
