The Consumer Financial Protection Bureau is pushing for the adoption of 'e-closings' -- but are they good for the industry?
By David Lykken
Special to MPA
As the Consumer Financial Protection Bureau continues to push the adoption of e-closings among mortgage banking organizations, the industry is headed for drastic change. The question is, 'Are e-mortgages good for mortgage banking professionals?'
When the CFPB recently presented its proposal on e-mortgages, several other agencies such as FHFA and the National Association of Realtors sat in on the call. But, two organizations that were not represented were the ABA and the MBA--the two core mortgage organizations.
So, should mortgage bankers see themselves as victims in this transition? I don't necessarily think so. It is true that going digital is a tough transition to make, and we must change our systems and approaches in a number of ways. It's going to be painful for sure.
On the other hand, the increased transparency promised by e-mortgages may restore the much needed trust to the industry. Consumers may be more willingly to apply for mortgages. And, more importantly, investors may be more willing to participate in the industry--diminishing the involvement of federal agencies. While it may be difficult for many in the industry to adapt, the strengthening of trust through increased transparency may make e-mortgages worth it in the end.
David Lykken is 40-year industry veteran who has been an owner operator of three mortgage banking companies and a software company. As co-founder and Managing Partner of Mortgage Banking Solutions, David consults on virtually all aspects of mortgage banking with special emphasis executive leadership development, corporate strategic direction and implementation as well as mergers & acquisitions. A regular contributor on CNBC and Fox Business News, David also hosts a successful weekly radio program called “Lykken On Lending” (www.LykkenOnLending.com) that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals. Recently he started producing a 1-minute video called “Today’s Mortgage Minute” that appears on hundreds of television, radio and newspaper websites daily across America.
