Mick Mulvaney's recasting of the Consumer Financial Protection Bureau marks a new day for the agency, but a substantial part of his authority to unwind rules — particularly on mortgages — was already part of the agency's tool chest before he arrived.
Last summer, the bureau under then-Director Richard Cordray sought comment on the effectiveness of its mortgage underwriting and servicing rules, both issued in 2013. The assessments are part of a Dodd-Frank Act requirement that the agency conduct five-year "look-backs" to tell whether "significant" rules are working out as intended.
Observers said the look-backs will likely aid Mulvaney, appointed as the CFPB's acting director in late November, in his stated plans to ease bureau rules. The assessment process could result in significant changes to the mortgage rules, many said.
"The look-back review gives Mulvaney an opportunity to undo a lot of the legacy of Cordray, and I don't think anyone realizes it," said Ed Mills, a managing director at Raymond James. "This is fertile ground for revising the rules and gives Mulvaney the chance to make more significant changes."
Technically, the CFPB's five-year look-back reviews only require that the bureau issue a request for public comment and a report, and it is basically up to the agency which rules are "significant" enough to get a look-back. So far, rules slated for a look-back are not limited to mortgage policies; for example, the agency launched one in March for its remittance rule.
2/22/18 WASHINGTON — Despite a legislative push by some senators and other stakeholders to jump-start housing finance reform, efforts to form consensus over a bill once again are stuck in neutral.
A draft of a housing finance reform bill being crafted by Sens. Bob Corker, R-Tenn., and Mark Warner, D-Va., was leaked late last month, but neither lawmaker has put their formal stamp on the legislation and it’s not clear when an official bill will be brought forward.
Groups on both the left and right have been unwilling to support the draft plan, and even though the focus may be shifting quickly to what the Trump administration can do without a bill to reform Fannie Mae and Freddie Mac, clarity on what an administration plan might look like has also been lacking.
In a recent interview, Corker acknowledged the difficulty of getting momentum behind a bill.
“It is a good-government kind of issue, not one that has a lot of huge political push,” he said. “It is moving slowly, but we had a good meeting with the administration" last week.
2/7/18 - Dallas-area home prices were 6.9% higher at the end of 2017 compared with a year earlier, according to a new report by CoreLogic. Dallas' year-over-year home price gain was slightly ahead of the 6.6% nationwide price increase from December 2016.
"Home prices continue to rise as a result of aggressive monetary policy, the economic and jobs recovery and a lack of housing stock," Frank Martell, president and CEO of CoreLogic, said in the report. "The largest price gains during 2017 were in five Western states: California, Idaho, Nevada, Utah and Washington.
"As home prices and the cost of originating loans rise, affordability continues to erode, making it more challenging for both first-time buyers and moderate-income families to buy," Martell said. "At this point, we estimate that more than one-third of the 100 largest metropolitan areas are overvalued."
Dallas-area home prices have risen more than 40% in the last four years, giving the area one of the greatest home price appreciation increases since the recession. At the end of 2017, some of the biggest annual home price increases were in Las Vegas (up 11.2%), San Francisco (10.1%) and Denver (8.1%).
CoreLogic predicts that nationwide home prices will rise 4.3% during 2018.
2/9/18 WASHINGTON — The House passed a bill Thursday that would loosen regulatory restrictions on the mortgage points and fees charged by lender-affiliated title insurers and other companies.
The Consumer Financial Protection Bureau caps points and fees at 3% for “qualified mortgages” that are in compliance with the agency’s ability-to-repay rule. However, certain real estate-related fees, such as for title insurance or appraisals, do not count toward the cap if they are paid to a company unaffiliated with the lender.
The Mortgage Choice Act, which passed the House 280-131, with support from both sides of the aisle, would exclude certain fees regardless of whether the company is an affiliate or not. It would also exclude insurance premiums that are held in escrow. A similar bill also passed the House in the previous Congress.
"By excluding these items from the calculation, it will allow more loans to qualify as QM and open up more credit to potential homebuyers," Rep. Keith Rothfus, R-Pa., said in the House floor debate Wednesday. Supporters of the bill argue that leaving lender-affiliated companies out of the exemption can increase the cost of the mortgage, even if the loan is QM. That is counter to the intent of the CFPB rules, they say.
2/6/18 - WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) today issued a Request for Information (RFI) about the Bureau’s enforcement processes. The Bureau is seeking information to help assess the overall efficiency and effectiveness of its processes related to the enforcement of federal consumer financial law. This is the third in a series of RFIs announced as part of Acting Director Mick Mulvaney’s call for evidence to ensure the Bureau is fulfilling its proper and appropriate functions to best protect consumers. This RFI will provide an opportunity for the public to submit feedback and suggest ways to improve outcomes for both consumers and covered entities. The next RFI in the series will address the Bureau’s supervisory processes, and will be issued next week.
The RFI on enforcement processes is available at: http://files.consumerfinance.gov/f/documents/cfpb_rfi_enforcement-processes_022018.pdf
The CFPB will begin accepting comments once the RFI is printed in the Federal Register, which is expected to occur on February 12.
More information about the call for evidence is available at: http://www.consumerfinance.gov/policy-compliance/notice-opportunities-comment/open-notices/call-for-evidence/