The mortgage business is “in a period of real change,” Brian O’Reilly, president and managing director of The Collingwood Group, said in a recent feature in DS News. In the article, titled “The Skies Ahead,” O’Reilly discussed the impact of fluctuating market conditions and delayed returns on deregulation.
“It’s an interesting and dynamic time in the industry, for a whole host of reasons,” said O’Reilly. “You have market volatility to the likes of which you haven’t seen in some time.” Refinance volume has tapered out and areas such as default servicing have become “substantially smaller,” he said.
O’Reilly also explained why many in the mortgage industry have not yet seen a reduction in compliance expenses. He said, “If you throw a stone into a pond, the ripples don’t occur across the entire pond immediately – they move over time. That’s what’s happening in the regulatory arena. You have a change in mindset in the context of regulatory enforcement burdens, where the sentiment of the federal government seems to be less aggressive than has been the case under the previous administration. However, that is not translating yet into lesser regulatory costs.”
In terms of scaling back the federal regulatory presence, O’Reilly told DS News the mortgage industry may need to be careful of what it has wished for. State regulators could decide to ramp up oversight and enforcement in response to a federal retreat. In that case, he said, “instead of one regulator with a heavy hand, you could have many, all applying rules in different ways, which would then cause risk-management and compliance costs to skyrocket.”
In planning for the year ahead, O’Reilly encouraged lenders and servicers to embrace innovation. “The mortgage process can be complicated and intimidating, and now is the time to think of new ways to approach customer pain points and give them better tools, technology and products for a more seamless, simpler experience.”
To read the complete article from DS News, click here.
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