Have you ever wondered who regulates mortgage companies? Does anyone make sure they are following all the rules and treating customers fairly?
The answer is yes. The federal government supervises mortgage companies through a host of different agencies, as well as acts enacted by Congress. Here’s an overview of how the mortgage lending industry and companies like Mr. Cooper rely on regulators to ensure our customers get fair and square service.
Congress has taken many actions related to mortgage lending intended to protect consumers — and mortgage lenders are held accountable by law to follow these requirements. Some are anti-discrimination laws, like the Equal Credit Opportunity Act (ECOA), that help ensure everyone has a fair shot at their dream home. Many are related to the disclosure of information that helps borrowers make educated decisions. The Truth in Lending Act (TILA) “requires lenders to provide you with loan cost information so that you can comparison shop for certain types of loans,” according to the Office of the Comptroller of the Currency, a division of the U.S. Department of Treasury.
The Real Estate Settlement Procedures Act (RESPA) “requires lenders, mortgage brokers, or servicers of home loans to provide borrowers with pertinent and timely disclosures regarding the nature and costs of the real estate settlement process. The act also prohibits specific practices, such as kickbacks, and places limitations upon the use of escrow accounts,” according to the Federal Deposit Insurance Corporation (FDIC) — itself an independent agency created by Congress to supervise banking and financial institutions.
So who makes sure companies are compliant with acts like TILA and RESPA? The answer is a combination of a government agencies that have the authority to create and enforce regulations on mortgage lenders.