But it is also viewed as a sunk cost at some firms, especially at a time when the bottom line is under pressure. Last year, lenders lost an average of $1.056 per origination, with expenses per loan at $11,258, both record amounts, the Mortgage Bankers Association said.

"The biggest concern [right now about compliance] isn't necessarily a specific issue," said Al Pitzner, co-founder and head of compliance strategy at a newly created firm Conforma Compliance Group. "It is a broader reluctance to view compliance as something other than a cost center."

During this era of mortgage job reductions, entire compliance departments have been let go and rather than leaving at least one skilled person in place, companies have given the task to a single operations person who reports to someone in a business unit.

"What I see as being a net result of that is when you get to 2025, and you're doing a two year look back, you won't be able to establish that even if you cherry pick the most important issues it's going to be apparent to a regulator that the culture of compliance with the industry was not to pay attention to compliance at all," Pitzner said. "I see a potential wave of enforcement actions happening in 2025 and 2026."

The Federal Housing Administration recently announced it fined over 70 program participants between $5,000 to almost $12,000 in federal fiscal year 2023.

While False Claims Act enforcement has fallen off since the peak of the Obama Administration, it is still a costly violation. Last June, Movement Mortgage agreed to a $23.75 million settlement with the Justice Department.

Pitzner founded Conforma with a fellow former chief compliance officer, Ed Miller. The new firm can perform the compliance work for the lender, or help them build this function up in-house, Pitzner explained.

Repurchase demands from the secondary market because of defects in manufacturing are also likely to rise because of the reduction in staff, Pitzner said. While the loan production defect rate fell in four consecutive quarters to 167 basis points, that was from a record 247 basis points, according to the third quarter 2023 report from Aces Quality Management.

Conforma is not the only recent entrant. Gate House Compliance was established as a subsidiary of Gate House Strategies in February. Among the key people at that firm is former Department of Housing and Urban Development Deputy Secretary and two-time Federal Housing Commissioner Brian Montgomery and Michael Waldron, at one time the chief compliance officer at Community Loan Servicing.

During a February interview with National Mortgage News, Montgomery compared views company boards might have regarding fair lending compliance with some past attitudes about cybersecurity, becoming concerned only after the spate of breaches.

"The regulators are darn serious about this," Montgomery said, noting for lenders it involves headline risks and reputational risks, as well as fairness.

For example, back in December, Navy Federal Credit Union was sued following headlines over its fair lending practices. At this point, the damage has already been done to the company's reputation, Montgomery noted.

"The unique offering here is how we've pulled together folks with deep and diverse backgrounds to add value to the industry and to the client base," Waldron said. "I think one of the issues that folks have is when they receive advice, how do they actually operationalize it?"

Because of the diverse backgrounds of the people behind Gate House Compliance, makes that advice more valuable to their clients, Waldron said.