As a result of the questionable lending practices that led to the housing crash, the Consumer Financial Protection Bureau (CFPB) has established a national standard for issuing mortgages. The Ability-to-Repay (ATR) Rule, designed to protect consumers from debt traps, took effect Jan. 10. Nationwide Title Clearing Inc. (NTC) predicts that the new guidelines will help standardize the industry. NTC officials also maintain that while the new regulations will likely not affect the company’s internal compliance processes, company officials expect a greater emphasis on NTC’s services that help lenders and servicers comply with the new national servicing standards, such as its various research and property report products.
The CFPB, created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, instituted the Ability-to-Repay rule with simple intentions:
►To prevent consumers from getting trapped in mortgages that they cannot afford;
►To prevent lenders from making loans that consumers do not have the ability to repay.
In response to the compliance requirements imposed upon lenders in the aftermath of the 2008 credit crisis, NTC developed a battery of research and property report products that enable lenders and servicers to take the actions needed to manage their loan portfolios with transparency and compliance. NTC CEO John Hillman says the company is committed to supporting the evolving mortgage industry, particularly in compliance with the recent CFPB regulations, by providing its clients with accurate and timely research and reporting services that assist in making loan servicing compliant with new standards, and simultaneously less risky.
“The Ability-to-Repay rule is designed to avert another financial crisis and our services are made to assist lenders in complying with that process,” said John Hillman, NTC’s CEO. “The new rules are likely to regiment the industry, so there will be fewer differences between mortgages offered by different lenders, thereby intensifying the competition and making compliance of the utmost importance.”
Despite some previous resistance to the CFPB regulations, NTC officials say that those who accept and embrace the standards—either as lenders or as borrowers—will have the potential to provide long-term stability to the mortgage industry.
NTC, perhaps most notable for its expertise in lien release processing and management, has worked closely for years with many of the country’s leading mortgage lenders and servicers to standardize the mortgage assignment document process, and has made a name for itself by perfecting that process for the betterment of borrowers, homeowners, land records and the industry at large.