Tuesday, September 9, 2014

Mortgage Lenders, Do the Right Thing

Integrity is doing the right thing, even when no one is watching.” – C.S. Lewis

The mortgage industry brought trouble upon itself when too many people in the industry weren't doing the right thing, and no one was watching.  Now everyone is watching, the CFPB, OCC, and each of the states’ regulators.  The prefaced C.S. Lewis quote makes the distinction that integrity is doing the right think simply because it is the right thing to do, not because you will otherwise get into trouble.  The mortgage lenders that are still around today likely were well-intentioned during the housing bubble, and did the right thing when the regulators weren't looking.  But now we are in a position to not only do the right thing, but document and prove that we do the right thing.  This adds costs which are ultimately charged to consumers.
In our business, we will be in trouble with our regulators and our customers if we don’t follow the alphabet soup of laws and regulations that we face:  RESPA, ECOA, TILA, HMDA, ATR, MDIA, UDAAP, HOEPA, FCRA, etc.  But when we apply C.S. Lewis’ definition of integrity to our core values, then we follow these rules because it is the right thing to do.
Each of us in the mortgage industry has the responsibility to understand the rules and abide by them.  Ignorance of the rules is not a valid excuse to violate them.  The CFPB has made that clear.  
Today we are taught to do the right thing because of the plethora of ways for us to get into trouble, but ultimately if we do the right thing because it is right for the consumer, I believe (translated "I hope") that we will escape the wrath of regulators.