Mortgage Professional America forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Adapting and rebelling: Working with CFPB

Notify me of new replies via email
Mortgage Professional America | 08 Dec 2014, 07:48 AM Agree 0
2 many in the industry are resisting the organization and assuming that, if they push back hard enough, it will go away. But let this be your wake up call — the CFPB is here to stay.
  • Jay | | 08 Dec 2014, 10:06 AM Agree 0
    Any organization that is headed by one individual, has little or no accountability to our elected officials in congress and the senate, and has it's budget unapproved, collects private information on individuals and is allowed to make, enforce, and create its own penalties and issue judgement on its own is not an organization created in anyone's best interest - simple as that.
  • Marc Savitt | | 08 Dec 2014, 11:21 AM Agree 0
    David, while I’ve always respected your opinions, I disagree with your comments in this article. I’ve been meeting with the CFPB on a regular basis since their inception. This includes meetings with Elizabeth Warren and Richard Cordray.

    While the CFPB has continually assured small business mortgage brokers and originators of a level playing field, we’ve seen just the opposite. An example would be the 3% rule. The CFPB allows lenders to receive SRP, because they (CFPB) “don’t know how to count it.” That’s their words, not mine. Therefore, the 3% rule only applies to mortgage brokers!

    The CFPB banned YSP, because they claimed it was an “unfair and deceptive practice.” However, SRP, which the Fed has acknowledged is the exact same thing, is allowed to continue.

    Raj Date, who is the former Deputy Director, gave speech after speech bashing brokers. Congressional testimony by the CFPB did much of the same.

    What about brokers not being able to order appraisals? Wasn’t it a federal chartered bank and an unlicensed AMC that were the subject of Cuomo’s investigation, which brought about the HVCC and now the AI rule? Banks, which played the biggest part in the fraud, are allowed to order their own appraisals. Is this a level playing field??

    What about licensing? Brokers and originators are required to be LICENSED, while LOs in banks are only registered. Does this sound like a level playing field?

    Your comment “So, let’s not be bad sports about this.” is infuriating to me as a 35 year veteran of this industry. I wonder if you’d be a good sport, if your income was limited and your competition was given a competitive advantage by a rogue government agency. Where’s their oversight??

    You also advised us to “Stop rebelling?” Your comments are tantamount to surrounding and allowing the CFPB to eliminate our industry.

    Please disclose to us, if you have accepted any consulting fees from the CFPB and/or the big banks?

    Marc Savitt, CRMS
    President, NAIHP


  • Viva la Revolucion | | 08 Dec 2014, 12:06 PM Agree 0
    What Jay and Marc said.
  • pat c | | 08 Dec 2014, 12:07 PM Agree 0
    Well said Marc - agree with every word!!!!
  • Andre | | 08 Dec 2014, 12:15 PM Agree 0
    Bravo Marc!!!!!
  • Griff | | 08 Dec 2014, 12:20 PM Agree 0
    Certainly what Marc said!! If the playing field were indeed level it would be easier to understand. However, the damage to appraisers and mortgage brokers on a business level and to consumers on that level is something that would be eye popping if a number were assigned to it.

    I don't have a problem competing with banks even with the advantages given to them by the cfpb, but it would sure bea lot eaiser to explain to a consumer if all the disclosures looked alike!

    Can't wait for the fall when we get the new (and improved?) GFE/TIL and consumers get to look at them for 3 days before closing. I just hope they feel protected.
  • Stop the Spin | | 08 Dec 2014, 12:29 PM Agree 0
    Marc hit the nail on the head again!

    From the article; "we played a large role in necessitating the creation of the CFPB. We let things get too far out of hand in the industry, and we gave the organization a reason to come into existence." WE DID NOT!

    Blaming brokers for the bubble is like blaming stock brokers for the stock market crash.
  • Steve F | | 08 Dec 2014, 12:41 PM Agree 0
    Please Jay do not speak for me, ever. "We all played a large role" Exactly who is "We all"? Study after study has shown that brokers did not make any lending decisions, did not have the ability to fund mortgages, and did not create any of the whacked out guidelines. Who did that? The Big Bad Banks. The same ones given special privileges when compared to brokers. The same ones who can still hire just about anyone to originate their mortgages with no major background checks, no testing, and no credit worthiness requirements. Is that the level playing field that is here to stay like it or not? There has never been an industry so damaged by a quasi government organization such as the small business originator, ie broker.

    Years from now when history can tell its own tale the damage to the industry and consumer both will be obvious even to folks like you who bury their head in the sand believing that these communistic organizations and regulations serve some worthy purpose other than squeezing small business and harming consumers they allegedly are designed to protect. Marc said it well, as he usually does.

    A more effective piece would have been to focus on comparing the 2 sides of the industry and asking, no screaming from the roof tops why is there such an imbalance coming from a regulatory agency who purports to be so fair and balanced. Until you are willing to be subjective on the topic, please do the rest of us a favor and speak only for yourself. Your voice sir, is not one that we need in the industry speaking for the rest of us.
  • | | 08 Dec 2014, 12:48 PM Agree 0
    Jay are you on the CFPB payroll? What a joke!
  • cliff riddle | | 08 Dec 2014, 01:04 PM Agree 0
    this is why unions were created and we surely need one or an organization that would standup to the cfpb and if necessary sue them for a whole host of ,,,,,, maybe a bunch of retired l.o.s that have nothing to lose and are no longer a scaired of losing their lively hood ???
  • Marc Savitt | | 08 Dec 2014, 01:12 PM Agree 0
    That's why we have the NAIHP.
  • Joe | | 08 Dec 2014, 01:16 PM Agree 0
    Not a big surprise to me that David Lykken would be in favor of the CFPB. One sector of his business is moving Mortgage Brokers to become Mortgage Bankers. He personally profits from the onslaught of legislation and the demise of the mortgage brokerage industry. To think his radio show or anything he puts out is impartial is silly. Just another mortgage banker keeping the lobbyists close and the playing field completely unfair while cashing checks all the way. Check out his own web page http://www.mortgagebankingsolutions.com/services/broker-to-banker-2.html
  • | | 08 Dec 2014, 01:34 PM Agree 0
    David, the arguments behind your plea are so weak and so poorly structured, they just don't make sense. I for one do not know anyone in our business "pretending" like it's still the good old days. What the hell are you talking about? The only obvious conclusion is that you are vying for some sort of pat on the back from the CFPB. What's the matter, you want to go on the Government dole too? Is the radio show not paying you well enough?
  • RANDALL SORENSEN | | 08 Dec 2014, 01:47 PM Agree 0
    IT SEEMS TO ME JAY, THANK YOU DRANK THE PUNCH WHILE VISITING THE CFBD. NOTHING THAT YOU SAID IS AGREEABLE OR HELPFUL TO BROKERS. NOTHING THAT DODD/FRANK OR THE CFBD HAS DONE HAS BENIFITED THE CONSUMER. COSTS HAVE GONE UP TO THE CONSUMER NOT DOWN. COSTS TO THE TAX PAYER HAVE GONE UP DUE TO THE CFPB AND THEIR SIZE AND PAYSCALE FOR EMPLOYEES. I SUPPOSE THAT THEY WILL BE PROFITABLE THOUGH. WITH THE ABILITY TO LEVY FINES AND THE POWER THEY AHVE BEEN GIVEN; THEY WILL LIKELY BE MORE PROFIABLE THAN APPLE. I WOULD LIVE TO KNOW HOW MUCH RICHARD CORDRAY IS BEING PAID AND THE AMOUNT OF HIS SELF AWARDED BONUS. I LIKE OTHERS WHO HAVE RESPONDED WOULD LIKE TO KNOW IF JAY HAS BEEN PAID FOR CONSULTING WITH THE CFPB OR ANY OF THE LARGE BANKS WHO TELL THE CFBB HOW THINGS SHOULD WORK. WE AS BROKERS HAVE GOTTEN ALOT OF BAD PRESS, MOST OF WHICH IS UNDESERVED. WE HAVE NEVER DESIGNED A SINGLE LOAN PROGRAM OR SOLD A SINGLE BAD LOAN TO WALL STREET. WE UNLIKE THE BANKS HAVE NOT BEEN ENJOYING RECORD PROFITS WHILE THE ECONOMY AND CONSUMERS HAVES SUFFERED. WE HAVE SUFFERED ALONG WITH THE CONSUMER. IF YOU WANT EFFICIENCY AND BETTER SERVICE IN THE INDUSTRY GET THE BANKS OUT OF THE BUSINESS. THEY ARE THE CULPRITS AND THE GREEDY ONES WHO HAVE CREATED THE MESS WE HAVE MUDDLED THROUGH IN THE PAST. JAY'S "WE ALL PLAYED A LARGE ROLE" IS OFFENSIVE TO ME AS WELL. I PERSONALLY HAVE BEEN ORIGINATING FOR 31 YEARS. I NEVER WROTE A SINGLE OPTION ARM LOAN, ONLY 1 INTERESTONLY LOAN, AND VERY FEW SUB-PRIME LOANS. I NEVER CHARGED MORE THAN A 2% FEE ON A SINGLE SUBPRIME LOAN. I ALSO DIDN'T DO A SINGLE ALT A LOAN EITHER. I DID NOT ACCEPT THAT THE ALT A PROGRAM WAS A LEGITIMATE BUSINESS FOR FANNIE AND FREDDIE TO BE IN. IF A CONTRIBUTED TO THE CRASH AT ALL, IT WAS IN A VARY LIMITED WAY.
  • nate | | 09 Dec 2014, 12:56 PM Agree 0
    Go Marc -you nailed it
  • | | 09 Dec 2014, 03:38 PM Agree 0
    The CFPB routinely disregards input from an entire market segment. It repeatedly attributes the segment's apparent lack of response to thousands of pages of convoluted proposals as apathy. The Bureau claims to listen to input from the segment but then categorically ignores the input. It unjustifiably singles out a channel with onerous and unwarranted treatment such as compensation limits. It refuses to respond in writing to requests for clarification. It generally treats over 12,500 companies and their 1-10 sponsored MLO's differently than a few hundred companies based simply on the nature of the funding of the products being offered. This all begs the question: What other choice does the disparately treated group have except to push back and rebel? Unless the expectation is that like Hamlet, the group should simply ponder whether it is nobler to die than to fight then it appears the article is driven by a blind allegiance to an unproven, so far ineffective and generally oppressive giant paid by the revenues of an organization totally funded by fees paid by the largest banks in the nation. That is no reason for those of us who care to abandon the fight.
  • David Lykken | | 10 Dec 2014, 01:01 PM Agree 0
    Greetings All,

    WOW, I obvious hit a nerve with the short article. I hope you will indulge me for a brief response. Marc, being the respected advocate for the mortgage brokerage and originator community, wrote me a scathing e-mail. In his e-mail, he made some great points and made me wish I had worded somethings differently. Best of all, I invited Marc to be my guest on my radio program so we can discuss all of this. He graciously agreed and post on this site post when that broadcast will be so you all can listen in. You can have your rotten fruit ready to throw when speak and cheer Marc when he speaks. Hopefully there won't be the need for that as you will better understand where I am coming from... hopefully. If nothing else, I am open to hear and learn how to better help everyone, especially brokers and originators.

    Now for the article, and we'll get into this a whole lot more when Marc is on the radio program. What I was trying to communicate, and apparently did a lousy job of it, was this... "the CFPB is here to stay" and suggest how we need to "recalibrate" our thinking. I now see how I could have worded things differently. For example, I wish I would have put in the article something to the effect that the vast majority of mortgage brokers had nothing to do with the mortgage meltdown and yet are suffering the consequences. The "WE" wording blew up in my face! I have been a student of the mortgage meltdown and have read most of books published on this topic. I am genuinely sickened by those that have laid this whole fiasco at the brokers feet. It resulted in a Tsunami of public opinion that can't be changed and now we need to deal with the hand of cards dealt to us. Again, when I have Marc on the radio program, I'll explain what I was trying to say when I wrote, "We all played a role in it"... and yes, I well understand how offensive that sounds and wish I had worded that better... my apologies.

    In closing, some facts...
    1st... No, I don't consult to the CFPB, never have nor to "big banks"
    2nd... to Joe's comment... Yes, I have done some "Broker-to-Banker" consulting in the past... and yes, I profited from doing it no different than you profiting when you make a mortgage... and for the record, it was a very low margin service. Besides, I thought it was a good thing to help those that wanted to make the transition, not a negative. Help me here... Where did I go wrong helping those who wanted to make the transition? Oh, and I don't know a single lobbyist and rarely in DC. And sorry you find my radio program "silly". That said, I will admit I have said my share of stupid silly things "on air", but I am trying to do my best to speak out... and 350,000 mortgage professionals who are listeners seem to find some redeeming value in it.
    3rd... I wish I hadn't written the words "pretending it is the good ol' days". Even though I see some evidence of that, it is a very very small percentage of folks and wasn't worth putting in the article.
    4th... Steve F., I am genuinely open to how to have a more effective voice in the industry and welcome constructive criticism. Hopefully you can respect the fact that I am out there trying and wanting to know how I can do so more effectively. Have you considered writing an article? I think MPA would be interested in it... just a thought.

    In closing, I want to publicly thank Marc for writing me and for graciously accepting my invitation to come on the radio program. It will be a great discussion and I hope to clear up some of the frustration expressed above. I encourage all of you to e-mail him with what to say.

    Sincerely and more humble than ever...
    David Lykken

  • | | 17 Dec 2014, 01:34 PM Agree 0
    Curious David on your comment:

    Yes, I have done some "Broker-to-Banker" consulting in the past... and yes, I profited from doing it no different than you profiting when you make a mortgage... and for the record, it was a very low margin service.

    When you say low margins service... what does that mean?

    Is there any government restrictions on how much you were able to charge for those consulting fees? If not, how would you react if you were restricted as to how much you can get paid on a transaction?

    BTW... when is the show?????
Post a reply