(Excerpt from Tomorrow’s Mortgage Executive, July 2011)
Every major change to an industry’s regulatory environment comes with a cost. Sometimes the cost is direct and known ahead of time, but often the true cost does not become clear until after implementation.
When evaluating the costs of new regulations it’s important to understand that all costs can be minimized. In order to minimize the costs, lenders must understand the costs. The obvious costs come in the hard dollars needed to implement a new system – the money spent on new forms or capital requirements.
Anticipating the hidden costs can be more difficult. If we look at past changes and borrower behavior, lenders can make educated guesses to what the true impact may be. Then lenders can make the adjustments needed to maintain profitability.
In the July issue of Tomorrow’s Mortgage Executive, DocuTech COO Scott K. Stucky outlines the dangers and costs of over-regulation and offers advice on how to control those costs. He also outlines how lenders can take steps to move from paralyzing uncertainty to measured risk.
Read the full article online at http://www.progressinlending.com/TME0711/TME0711-39.pdf.