Mortgage
industry commentators may argue (and they certainly have) about
the Consumer
Financial Protection Bureau’s (CFPB)
performance over the last year, but one thing is certain: The bureau
knows how to command headlines.
Early this year, CFPB finally issued its long awaited Qualified Mortgage (QM) guidelines along with a slew of other finance regulations. With the future of housing finance on the line, it’s no wonder readers of DSNews.com couldn’t tear themselves away from the news.
The
story started January
10,
when CFPB finally released its criteria for legally and
financially sound loans. Including in the provisions was the Ability
to Repay rule, which established criteria for lenders to judge a
borrower’s financial qualifications and their ability to meet all
of their debt obligations. The QM guidelines also gave the boot to
riskier loan features and limited points and fees.
CFPB’s
release also set an implementation date for the changes: January 10,
2014—one year after the announcement was first made.
That
wasn’t the agency’s only January announcement. In the days that
followed, a number of releases came down, establishing regulations on
issues ranging from high-cost
mortgage practices, servicing
requirements, appraisal
rules,
and originator compensation—each
one adding another layer of complexity.
In
response to industry concerns, the bureau revisited its
QM rules in April, changing some of the language and expanding the
definition a bit to include a wider field of loans.
As
lenders, servicers, and other mortgage segments wrestled with
compliance, CFPB was fighting battles of its own in
Washington.
In
late April, Director Richard Cordray—whose future as the head of
the agency was still up for debate following his re-nomination—sat
before the Senate
Banking Committeeto
defend the National Mortgage Database, a joint effort
between CFPB and the Federal Housing Finance Agency (FHFA)
to compile a comprehensive repository of borrower profiles and other
loan information. Addressing complaints of possible privacy
violations, Cordray maintained that personal identities would not be
disclosed and insisted on the need for such a database.
“You
have to have information about consumers if you’re going to
understand what is going on in the consumer marketplace. There’s no
two ways about this,” he testified at the time. “If we don’t
have data and information … we can’t do that and we can’t do
our job, and you would be upset with us and rightly so.”
Months
later, Cordray got some good news: After months of debate, the Senate
finally struck a deal to end legislative gridlock and move forward
with executive nominations—confirming Cordray as CFPB director for
the first time since his much-disputed recess appointment in 2012.
After
rocking the world of housing finance in the first half of
2013, CFPB saw a fairly quiet second half, with most
mortgage-related announcements dealing with disclosure
requirements or regulatory enforcement actions.
It’s unlikely things will stay that way, though—with the January
10 deadline only weeks away and an industry waiting anxiously (or
apprehensively) to see what comes next, 2014 looks to be another big
year.
For more information contact
Jerry Gusman
The Gusman Group
(888) 213-4208
jerryggroup@aol.com
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