The Scope of the Policy Deficit
Compliance & Regulatory Policies
Many mortgage lenders still rely on legacy procedures or undocumented practices that fail to meet CFPB, HUD, or state-specific requirements. These gaps lead to:
- Increased audit findings and penalties.
- Delays in licensing or renewal approvals.
- Poor internal control over consumer protection regulations like RESPA, ECOA, and TILA.
Cybersecurity & Data Privacy
In an industry handling vast amounts of sensitive personal and financial data, not having a robust cybersecurity policy can lead to:
- Exposure to ransomware, phishing, and vendor data breaches.
- Failure to meet FTC Safeguards Rule requirements, effective as of June 2023.
- Reputational damage and loss of borrower trust after incidents.
Third-Party Risk Management
Mortgage companies frequently outsource document processing, appraisals, lead generation, and more. Yet:
- Many have no formal policies for vetting or monitoring vendors.
- This increases liability in the event of vendor-related breaches or fraud.
- Regulatory bodies like the OCC and CFPB are prioritizing third-party oversight in examinations.
Fair Lending & DEI Compliance
With renewed focus on equitable lending, lacking fair lending policies can trigger:
- Disparate impact findings.
- Loss of access to secondary market investors.
- Negative press and public scrutiny.