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Fair Lending and Related Mortgage Developments and Trends

OnDemand Webinar (87 minutes)

Understand the federal regulatory guidance concerning fair lending issues in mortgage originations, marketing, and servicing.Banks and financial institutions continue to face regulatory actions based on fair lending violations. In particular, the products and services that banks offer and the way these products are delivered is being challenged to be faster and nimbler. Today's bank must consider non-traditional mortgage origination in areas that were once considered outside the banking zone; including being able to originate loans using such tools as internet products and payment platforms. This topic will describe the areas of concern for regulators who are looking at compliance with fair lending laws and the possibility of disparate impact. In addition, we will discuss the interaction of the fair lending laws with various other regulations (e.g., Equal Credit Opportunity Act, Flood Insurance Rules and the Unfair, Deceptive, Abusive Acts or Practices Act). Finally, we will discuss strategies for monitoring compliance as products and services change.


James DeFrantz, CRCM, CAMS, J.D., Virtual Compliance Management


Consumer Compliance Regulations All Have a Particular History

• In Each Case Consumer Regulations Have Been Developed Based on Behavior or Practices That Have Caused a Public Outcry

• Similar History of Fair Lending Laws

• Community Reinvestment Act (CRA) Fair Lending Components

Fair Lending Laws Are Directly Related With and Intertwined With Several Other Regulations

• The Unfair, Deceptive, Abusive Acts or Practices Act (UDAAP)

• The Use of Appraisals and Real Estate Valuations Also Can Present Issues With Compliance With Fair Lending Rules

• A Violation in This Area Is Likely to Be Systemic, Which Can Lead to Large Fines and Even the Dreaded Look-Back

Fair Lending Laws

• The Fair Lending Examination Procedures of the Regulators All Include a Section for Reviewing Consumer and Commercial Loans

• Factors That an Examiner Will Review When Performing the Commercial Loan Portfolio

- Pricing Disparity

- Pricing Exception

- Underwriting Disparity

Are You Ready for a Fair Lending Examination?

• Questions That Should Be Answered When Considering the Overall Effectiveness of the Fair Lending Program