Verifying income and other information that measures a borrower's ability to meet specific mortgage terms digitally calls for a mix of imaging and digital signature technology linked to customer relationship management systems and other customer databases. That technology and other digital processing measures may have to be deployed to procure the information necessary for a mortgage to attain "qualified" status.
Some smaller lenders have turned to outsourcing, resource sharing or the data cloud to manage mortgage regulation compliance. "The larger banks have the lawyers, the staff and the technology to handle a larger compliance burden" but "smaller banks don't have that," says John Berlau, a senior fellow at the Competitive Enterprise Institute.
Even given the burden on small banks and the temptation for insurers to distance themselves from banking because of regulatory stress, Wannemacher says it's a stretch to contend that the pending regulations will force an otherwise healthy company out of business entirely.
"What's more likely to happen is some company that has dabbled in one or two banking products will reduce their investment in that line of business," Wannemacher says.