In a new report on several markets within financial services, the Consumer Financial Protection Bureau finds problems in mortgage origination having to do with disclosure compliance.
In the report, released in early November, the CFPB outlines areas of compliance concern spanning markets including mortgage origination, credit cards and credit reporting.
The CFPB’s Supervisory Report for Fall 2012 focuses on three principles: the agency’s ability to detect, prevent and correct risky practices; the analysis of data coming from the entities it supervises; and the examination of those entities.
Among the report’s findings, companies have shows compliance deficiency in several areas, which the agency intends to correct.
“They include deficient compliance management systems, and regulatory violations related to credit cards, credit reporting, and mortgage lending,” the CFPB writes in the report. “When the CFPB finds violations of applicable Federal consumer financial law, it directs them to be corrected. Where consumers have experienced harm, it generally directs restitution. As appropriate, the CFPB may also pursue other relief.”
Specific to mortgage origination, the CFPB noted violations of the The Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act (TILA) and Home Mortgage Disclosure Act (HMDA). The non-compliance included failure to make proper and complete disclosures to consumers such as costs, transaction terms and improper completion of the Good Faith Estimate and HUD-1 settlement statement.
Written by Jason Oliva