PHOENIX—The mortgage industry is facing new regulationsaffecting the real estate market post-recession.GlobeSt.com recently caught up with ChuckMatthews, responsible for leading the strategic directionfor WGM Associates, aScottsdale-based technology company that helps real estate relatedbusinesses like title companies, to discuss these changes and how theyaffect the industry.

GlobeSt.com: What mandates have the federalgovernment placed upon the mortgage industry and why were thesechanges put into place?

Matthews: The mortgage industry is facingnumerous challenges as it struggles back from the implosion of theUS economy in 2008. The end of the mortgage refinancing boom andweak demand for new loans has resulted in declining mortgage loanvolumes. At the same time, legislation and regulation intended toprevent another financial crisis has led to dramatically increasedoversight and compliance requirements and costs. The post-mortem ofthe financial crisis revealed many systemic deficiencies that insome instances led to fraud, escrow fund theft and excessivemortgage losses. Some of these problems stemmed from outsourced orthird-party service providers utilized in the mortgage lendingprocess. Banks continue to rely on a large number of complexrelationships with both foreign and domestic third partiesoutsourcing functions such as tax, legal, title, escrow, audit,marketing and/or information technology operations. The integrationwith third-party providers is often to such an extent the third-arty becomes an integral component of the bank's operations,directly engaging with the bank's customers.