Mounting Compliance Costs Eating Up Lender Profits

[Corey Dutton]

According to an article from MPAMag.com, lender’s profits have been affected by the high costs of compliance that have been mounting since 2008.

According to MPAMag.com, “Production expenses in the third quarter were the highest recorded since MBA began keeping statistics in 2008.”

These high compliance costs are passed on to the borrower and have substantially increased the overall cost of borrowing. Not only does the high cost of compliance affect the borrowers’ pocket book, but also affects borrowers’ ability to even qualify for a loan. Most lenders can’t qualify borrowers because of so many new compliance-related items that come up during the underwriting process. According to mortgage business development manager for Security National, “In over 25 years of doing loans, I’ve never seen so many hurdles in the loan approval process. It has certainly gone way too far in one direction with regard to compliance.”

Posted by Corey Curwick Dutton