Federal mortgage compliance enforcement has eased noticeably in 2025, but the underlying legal risk has not moved. Scott McNulla of SitusAMC argues that lenders treating lighter scrutiny as a reprieve are setting themselves up for serious exposure when examiners eventually look back at loans being originated right now.
Scott McNulla, senior managing director of compliance solutions at SitusAMC, gives a direct answer: no. He compares the situation to a driver who speeds because no patrol car is visible. The speed limit has not changed. Federal enforcement actions against financial services firms fell 37 percent in the first half of 2025, with monetary penalties down 32 percent, according to the Wolters Kluwer Regulatory Violations Intelligence Index. "There shouldn't be a lull or relaxation in a lender's approach to compliance just because of the headlines," McNulla says. History reinforces the point. During the 2008 financial crisis, examiners reviewed files going back to 2004, years before the collapse.
The CFPB moved to lay off approximately 90 percent of its staff, roughly 1,482 employees, and dismissed 16 enforcement actions with prejudice under the new administration. A March executive order also directed the bureau to consider tailoring ability-to-repay and qualified mortgage requirements. Those are signals, not law. Any amendments still need to clear proper regulatory channels. Until rules change through that process, existing statutes remain fully in force. McNulla points out that a new CFPB director can shift the bureau's priorities sharply in either direction at any moment. Standing down now does not mean the agency will not surge forward again, and lenders holding non-compliant files will have no cover when it does.
States have moved quickly to occupy the space federal agencies are leaving. California merged its Department of Financial Protection and Innovation and its Department of Real Estate into a single body, the Business and Consumer Services Agency. The appointment of former CFPB director Rohit Chopra to lead it signals an enforcement-minded approach the industry already recognizes well. McNulla expects other states to mirror the model. Some states fund examination work partly through fines and penalties collected, which creates a direct financial incentive to coordinate and pursue findings. Shared examinations also ease staffing constraints. In McNulla's reading, more frequent, joined-up state oversight is the direction the whole system is heading, regardless of what happens at the federal level.
Documentation is the one part of the origination process fully within a lender's control, and it is the strongest defense if a loan is questioned later. A common gap is intent to proceed. A borrower must authorize appraisal charges only after agreeing to move forward, but that authorization often sits as a note inside the origination platform rather than as a memorialized record in the file. If litigation surfaces two years out, a buried platform note offers little protection, especially after the loan has been sold to a different owner. Systems track what was done, but they rarely capture why. A rate increase or updated fee needs the reasoning attached, because the person who made the change may not be reachable months later.
Brokers may not face the same standard as the lenders they place business with, but partner selection still lands on them. In wholesale lending, the broker is the face of the loan to the borrower. A lender that approves a file a compliant lender would decline may appear to be a win, until that loan goes delinquent. A borrower's complaint can then pull in the broker, the servicer, and even the real estate agent who made the original referral. Consent orders are posted publicly through NMLS Consumer Access, so a problem in one state follows a firm into every other. McNulla describes playing fast and loose as risking not only fines but future volume reductions and lost growth opportunities.
State regulators, working with the Mortgage Bankers Association and MISMO, are developing a standardized mortgage compliance data set. Regulators will require examination files extracted directly from origination systems and run through an automated compliance engine. McNulla expects this approach to roll out over the next few quarters. The scale difference from manual review is significant. A manual examination might cover 20 to 40 files, while an automated one can process hundreds, with sample sizes expanding when exceptions appear frequently. Lenders that test their own files now, the way examiners soon will, are far better positioned to respond. SitusAMC's ComplianceEase checks loan data throughout the origination lifecycle and post-closing, so compliance issues are resolved before a file reaches a regulator or third-party reviewer.
Act before scrutiny arrives, not after. A well-documented, tested file moves through investor due diligence and eventual regulatory examination with fewer exceptions. A disorganized file is where questions start. Third-party review firms like SitusAMC perform exactly the kind of post-closing review an investor commissions before a loan purchase, making them a practical benchmark for internal preparation. McNulla's message is direct: "There shouldn't be a lull or relaxation in a lender's approach to compliance just because of the headlines. Potential deregulation or lack of enforcement is a current condition, but the possibility of enforceability doesn't go away − the laws are still out there. Stay vigilant." Getting the house in order now protects reputation, investor relationships, and future lending volume.
Scott McNulla: senior managing director of compliance solutions, SitusAMC; specialist in mortgage origination compliance, third-party review, and enforcement risk management.