2.1- What Regulatory Authority Oversees the Mortgage Industry?


Buying a home is one of the biggest Investment one makes during their entire life time. Very few people can actually buy a home outright with cash. Therefore in order to fulfill the American dream of Home Ownership, individuals have to rely upon lenders to get approved for a home loan, The mortgage Industry plays a vital role in the financial system. In order to safeguard the interest of the borrowers, the Federal Government has regulated the mortgage Industry through a series of Acts passed by Congress.

Regulation Z, "Truth in Lending Act" or TILA protects consumers and requires lenders to make full disclosure about Interest Rates, Fees, Terms of credit, and other Provisions. Regulation X, RESPA "Real Estate Settlement Procedures ACt" prohibits kickbacks as well as demands for large escrow accounts.

The Consumer Financial Protection Bureau "CFPB" is the major enforcer and supervisor for the Federal Government of the mortgage Industry.

The CFPB is a relatively new entity created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The Dodd-Frank Act gave the CFPB a lot of goals to accomplish to increase the oversight and regulatory burden of the mortgage Industry.