Despite the extra costs and anxiety that mortgage industry professionals say come with compliance due to heightened regulation, a recent survey revealed that a majority of them would not be willing to pay for relief – a result that a survey analyst found "shocking."
On the Voice of Housing blog published by the Collingwood Group on Tuesday, analyst Margaret Mooney examined the results of the recent survey conducted by the Collingwood Group in conjunction with the Five Star Institute. Despite the fact that 89 percent of the mortgage industry professional surveyed by the Collingwood Group last September said regulations were hurting their business, 76 percent of respondents in the question posed in March's Mortgage Industry Outlook Report said they would be willing to pay up to 25 basis points when asked how much they would pay "to be relieved of all liability for future buybacks, indemnifications and/or lawsuits" – but in reality, they would pay only five to 10 basis points.
"They argued that this is a reasonable range because it is what the majority of originators currently retain for repurchase reserves," Mooney wrote. "Some indicated that it depends on the loans in question and the severity of the indemnification agreements and/ or lawsuits."
Twenty-four percent of those surveyed said they would pay up to 50 basis points for relief from liability, while 1 percent indicated they would pay up to 75 basis points. Seven percent said they would pay up to 100 basis points, and just 1 percent said they would pay more than 100 basis points. Mooney said the results of the survey were "shocking" when considering last September's survey results.
"Given the results from previous surveys where respondents indicated that the risk of buybacks, indemnifications and lawsuits were a major concern, we expected respondents to be willing to pay more for peace of mind," Mooney wrote.
(Editor's Note: The Five Star Institute is the parent company of DS News and DSNews.com)