David Lykken: Do we really need more regulation?

by MPA06 May 2014
By David Lykken
Special to MPA


For mortgage bankers, it seems that the regulation never ends. The Federal Housing Finance Agency and the Consumer Finance Protection Bureau have both recently discussed plans to more intensely regulate mortgage bankers. How many more hoops will we have to jump through? Mortgage bankers provide a valuable service to society. We get people into homes and allow them to claim the American dream. Why does it sometimes seem like the entire universe is conspiring to stop us?
 
Of course, it's easy to throw up our hands in defeat. It's easy to blame the regulators for our challenges. And, believe me, I'm certainly no fan of more regulation. The recent announcement of the FHFA's plans to try to audit mortgage bankers directly absolutely blew my mind. My first thought was, "Do we really need another organization telling us what we can't do?"
 
But then I think about the companies who have generated the attention of these regulatory agencies. I think about the organizations who have behaved unethically and brought auditors down upon them. It's then that I realize we don't need more regulation; we need more self-regulation. We don't need more government organizations telling us what to do; we need stronger leaders who make those auditors unnecessary.
 
At some point, we just have to deal with reality. The regulation isn't going to stop. More government organizations are going to continue to seek direct access to mortgage bankers. All we can do is be prepared. All we can do is what we should have been doing all along. Before we're audited externally, we should audit ourselves internally. That's the only way we can survive the inevitable onslaught of more regulation to come.
 
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. 
 

COMMENTS

  • by Jim in CT | 5/6/2014 11:04:14 AM

    Just recently I saw a wholly unsuitable HELOC-style full refi "sold" to a pre-retiree. Monthly-adjustable I/O ARM converting to a 15-year amortization AFTER he retires. An entirely unsuitable sale, and a magnet for regulators and politicans. Written by a large institution that has paid over $1 billion in fines already so it's reasonable to presume that they don't care. (I really didn't think anyone had the stones to try to market something like this anymore). When we stop tolerating this behavior in our midst perhaps things might ease up. But not til then, so get ready for more.
    As Mom always said, if you abuse privileges they get taken away.

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