Mortgage lender First Meridian Mortgage Corporation went though its first-ever Consumer Financial Protection Bureau audit this month, just a matter of weeks after the government agency received its authority to examine non-bank mortgage lenders. The company operates a small reverse mortgage division in addition to its forward business.
The CFPB representatives were on site at the company for six business days, company vice president Michael Pinter told RMD. During the course of the six-day examination, the agency asked for 60 files, and compared them to First Meridian’s Home Mortgage Disclosure Act (HMDA) report, he says. Industry members and advisors have long speculated on what the audits would entail.
“They found some minor discrepancies and told us to refile our HMDA report,” Pinter says. “They then asked for 100 files to check compliance issues. We gave then the files electronically and they said they will check them offsite.” Some of the files requested were reverse mortgage files, but the company has yet to receive any follow up on them.
Additionally, Pinter says, CFPB auditors interviewed all department heads within the company and asked questions among them.
The Home Mortgage Disclosure Act was enacted by Congress in 1975 and was implemented by the Federal Reserve Board’s Regulation C. Through the transfer of authority from the Fed to the CFPB, the new agency received the rulemaking authority for HMDA in July 2011.
Pinter did not note any surprises from the audit of First Meridian, nor did he says the CFPB exercised the use of its “Unfair and Deceptive” authority. In recent statements, representatives from the bureau said they will first look at the largest non-bank lenders that are likely to interact with the greatest number of consumers.
Written by Elizabeth Ecker