Mortgage Pricing Scrutiny Poses New Challenges For Lenders

Notwithstanding the dramatic expansion of consumer financial protection regulation in the wake of the financial crisis and the Dodd-Frank Act, most would still agree with the general principle that markets, not regulations, should determine the prices that consumers pay for taking a loan. But recent federal and state enforcement actions indicate that, even if regulators are not setting “the right price” for a loan, they are increasingly willing to declare certain prices “wrong.” This is a troubling development for mortgage lenders, which face potential action even when their pricing is nondiscriminatory and accurately disclosed. However, there are steps lenders can take to minimize the risk of unwanted regulatory scrutiny.

Originally published in Law360; reprinted with permission.