Mortgage servicers are seeing signs of relief regulatory scrutiny, but the environment will continue to be uncertain, according to an analysis by S&P Global Market Intelligence.
While scrutiny has become more burdensome over the years, S&P said a number of actions taken by regulators to support a more business-friendly environment for lenders and servicers are moderating the regulatory environment.
The analysis cites as an example the recent approval by the Senate Banking Committee of the nomination of Kathy Kraninger to replace acting director Mick Mulvaney as the new head of the CFPB. Kraninger is seen by many as someone who will follow Mulvaney's regulatory approach.
“We believe that the regulatory environment will remain uncertain as the CFPB establishes its regulatory routines and enforcement protocols with servicers,” according to the S&P report.
While federal-level regulation shows signs of easing, S&P noted that many state regulators have expressed their desire to create state-level consumer enforcement agencies to fill a perceived void at the federal level.
The S&P noted that the New Jersey governor early this year nominated the previous acting counsel to New York City's mayor to serve as the director of the state's Division of Consumer Affairs and enhance it into more of a state-level CFPB. Meanwhile, the Pennsylvania attorney general created a Bureau of Consumer Protection that is led by a former CFPB attorney.
“Additionally, since servicers have invested considerable capital--both financial and human--we expect them to continue to follow industry best practices despite the possibility of loosening regulations,” the analysts also said.