OCC Says Multi-Dimensional Risk Management Imperative for Industry

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In this article, written by Krista Franks Brock, points out the need for a diligent effort to regulate the mortgage industry both from within and without. This is the only way to ensure that the mortgage business doesn’t fall back into the old practices that caused widespread mayhem in the past. Please read the article below and let me know what you think.

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Speaking at an industry conference in Phoenix, Arizona, Wednesday, Darrin Benhart, deputy comptroller for credit and market risk with the Office of the Comptroller of the Currency (OCC), said the changing regulatory environment requires mortgage lenders to consider a number of potential risks on different fronts.

“As you well know, the list of mortgage-related reforms is extensive,” Benhart said, naming the qualified mortgage (QM) and qualified residential mortgage (QRM) among them. “These reforms mean you will need an even greater emphasis on risk management techniques that not only look at credit risk but also encompass operational and compliance risk,” he said.

While in the past, various aspects of risk were often considered and managed individually, Benhart says going forward, it is important for all risks to be monitored in a holistic manner.

“Risk management groups today need to be multi-dimensional, and banks need a culture that promotes risk identification across business lines,” he said.

Benhart says home equity lines of credit (HELOCs) and collateral valuations are two key areas his office will be watching in the coming year.

To see the complete article – please use the link below.

Risk Management Imperative for Industry

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