WASHINGTON — The Consumer Financial Protection Bureau issued supplementary guidance Wednesday on its exam procedures for mortgage originators.

The bureau published the Mortgage Origination Examination Procedures as a supplement to its field manual, which examiners will use as a guide when looking at both bank and nonbank mortgage lenders.

"The mortgage market cannot work well for consumers if the spotlight shines only on one part of it, while the rest is left in darkness," Richard Corday, the bureau's director, said in a press release. "Our supervision program will illuminate the entire marketplace by making nonbanks play by the same rules as the banks."

This is the second product-specific supplement that the bureau issued to its exam manual. The first, released in October, outlined special exam procedures for mortgage servicing.

The guidance describes the types of information the CFPB will collect to evaluate originators' policies and procedures, assess whether they're in compliance with the law and identify risks to consumers. The manual also tracks key mortgage originator activities, from initial advertisements and marketing practices to closing procedures, according to the press release.

Reforming the mortgage markets is one of the bureau's top priorities, and one of its primary responsibilities under the Dodd-Frank Act. The law requires the bureau to issue a rule — expected early this year — that requires mortgage originators to verify a borrower's ability to repay a loan. And it is already working with other regulators to develop new servicing standards.

Mortgage lenders are also one of three types of nonbanks that the bureau is now able to oversee, regardless of size. The exam guidelines on servicing and origination will apply to both banks and nonbanks.

"Given the backdrop of the financial crisis and everything that went on in the mortgage market, that's something that we obviously want to get on top of and stay on top of," Peggy Twohig, CFPB's nonbank supervision chief, told American Banker in an interview last week.

The bureau plans to develop its nonbank supervision process based on risk assessments, including factors such as the volume of business, types of products or services and level of existing state oversight. Twohig said she expects examiners will begin pre-exam scoping within a month or so.

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