Provisions of the Dodd-Frank financial reform legislation that will be enforced by the new Consumer Financial Protection Bureau (CFPB) will change many mortgage servicer practices, according to a panel of compliance attorneys speaking on the closing day of the SourceMedia Mortgage Servicing Conference in Dallas.
Fair lending rules enforced on the origination side of the industry will be applied to servicers, explained Patrice Ficklin, an attorney at Relman, Dane and Colfax.
"That's what they're borrowing from as they get their arms around fair lending as it comes to servicing practices," she said.
In addition, fair lending compliance won't just be enforced by the new CFPB (which will assume enforcement of the Equal Credit Opportunity Act and the Home Mortgage Disclosure Act), but also by the Department of Housing and Urban Development (HUD), which will retain enforcement of the Fair Housing Act.
"It’s really going to be an alphabet soup on the federal level for fair lending enforcement and supervision," Ficklin said.
Dodd-Frank creates a new definition of fair lending: "Fair equitable and nondiscriminatory access to credit for consumers," and depending on how that new definition is interpreted, access to fair credit could include loan modifications, Ficklin warned,