When it comes to assessing the risk of a closing agent, would it make sense to have minimum standards? Also how would the regulator view a one person closing agent shop vs. a large closing agent handling closings in multiple states?

One of the ongoing concerns about all of the enhanced regulatory requirements is that they place a burden to the point of exclusion on smaller shops. You reach a point where there’s simply too much for one entity to do and while the Bureau has put in place certain limited carve outs (there are certain small creditor exemptions in the mortgage servicing and origination rules), the general requirement is that everyone is expected to follow the law and there are no exceptions for small guys, notwithstanding the fact that there is serious public debate about whether the problems in the mortgage industry and real estate industries were caused by the smaller actors. The amount of required oversight would depend on the volume that the one-person shop is handling. However, while it’s sort of silly for a one-person shop to have all of these policies and procedures, I think it’s going to be expected to have them if they’re closing a significant number of loans. They’re going to be expected to comply with the law like anyone else.

Answered By: Ben Olson