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CFPB rules necessary to clean up sloppy practices: Cordray

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Mortgage Professional America | 22 Oct 2013, 06:02 AM Agree 0
CFPB director Richard Cordray has defended the bureau's mortgage rules, saying they will help to "clean up many sloppy" practices
  • being human | | 22 Oct 2013, 08:40 AM Agree 0
    I heard all the big banks are going to stop all non essential mortgage lending. And are going to just buy servicing from these smaller lenders.All the large lenders are going to give the smaller lenders and brokers warehouse lines that they control. So as to by-pass all the new rules.
  • Always generalities... | | 22 Oct 2013, 08:52 AM Agree 0
    He never says specifically what is he talking about.
    "the status quo would not have remained in effect" Which is?!?
    "end many irresponsible lending practices" Which are?!?
    "designed to clean up many sloppy and unsatisfactory practices" Which are?!?
    “We made this change in our rules to reflect our deeply held view that community banks did not engage in the kinds of irresponsible practices” So he’s saying he believes the rest of the industry did! Talk about prejudice and ignorance generalizing a huge group!
    "The law also would not have provided a clear safe harbor against litigation to all prime QM mortgages, as our rules now do.” Does anyone believe this?!?
    Why not mandate a 25% DTI and a 50% LTV…That will be ever ‘safer’ right?
    QM will save us…is he fooling anyone?
  • Dan | | 22 Oct 2013, 09:13 AM Agree 0
    What's he talking about. Talk to anyone who has applied for a home mortgage during the past several years since the financial debacle and they will tell you that they've had to provide just about bit of information regarding their credit and financial situation to get a home mortgage. What the director should have said is that the new rules were put in place to prevent a situation like 2008 from happening again!
  • Jeff Bode | | 22 Oct 2013, 09:26 AM Agree 0
    As the owner of a mid sized mortgage company I am pleasantly surprised at the influence of the CFPB. It is nice not to have to compete with those that abuse the consumer. At its creation I was scared that the cost of compliance would be worse on mid sized firms, but if you strive to do it correctly as opposed to get around the rules it works.
  • Just saying | | 22 Oct 2013, 09:49 AM Agree 0
    And the law made no special provision for small creditors (those with $2 billion or less in assets and making 500 or fewer mortgages per year) by deeming as qualified mortgages all the mortgages they keep in their portfolios. We made this change in our rules to reflect our deeply held view that community banks did not engage in the kinds of irresponsible practices that gave rise to the financial crisis," Cordray said.
    The Idea of the Consumer Financial Protection Bureau was (I thought) to protect consumers. That is good, but how does given exceptions to community banks, and allowing banker to make more than broker (while not having to "disclose this fact") protect consumers? Just wondering.
  • John Deleva | | 22 Oct 2013, 10:37 AM Agree 0
    Regulation to protect consumers from the most egregious violations of fairness is a function worthy of support. Micro managing free enterprise while often well intended will actually increase cost and decrease service to the very consumers that are the subject of protection while at the same time government grows and our liberties shrink.

    Early education with a focus on financial literacy, simplification of financial disclosures and high professional standards will go farther in protecting the consumer than any well intended CFPB. If the CFPB focused its formidable resources on these factors consumers would be best served and the idea of free markets preserved.

    It is ironic that the very government made up of politicians that have done little in protecting the nation’s financial interests by way of their perpetual financial mismanagement of government resources leads the charge to protect the consumer. The financial mismanagement that now has our nation facing a 17 Trillion Dollar national debt, deficit spending and unimaginable waste and fraud is the true threat to the American People perpetrated by the very folks trying to protect us. The irony continues in that the very attorneys for whom most of the written directive and compliance enforcement activities come from are themselves not the subject of a national effort to protect consumers from their profession...talk about the "fox in the hen house"!!

    The unintended consequences are many driven by people in places of authority that have little understanding of the very industry they are lording over. I guess in the end we the American People will need to decide if complying is truly in our best interest or if we need to respond to the aggressions of our out of control government by demanding that our government finds its way back to the intended role so clearly defined in the not so complicated United States Constitution…the latter may be difficult for we governed may be left with too little energy after complying to mount a push back or any consequence.

    Respectfully,
  • OG Mortgage guy | | 22 Oct 2013, 10:43 AM Agree 0
    I'm glad I'm old. This agency is run by people whose only knowledge of mortgages is making payments on them, and I'll bet some of them don't do that very well.
    They don't understand that limiting broker compensation is a drop in the proverbial bucket compared to what mortgage bankers earn by bumping up rates to consumers, or what the aggregators make when they sell to Wall St. Limit a broker to 3% but bankers are making 8 plus origination fees by hiding behind a warehouse line. They just don't have a clue.
  • OG Mortgage guy | | 22 Oct 2013, 10:43 AM Agree 0
    I'm glad I'm old. This agency is run by people whose only knowledge of mortgages is making payments on them, and I'll bet some of them don't do that very well.
    They don't understand that limiting broker compensation is a drop in the proverbial bucket compared to what mortgage bankers earn by bumping up rates to consumers, or what the aggregators make when they sell to Wall St. Limit a broker to 3% but bankers are making 8 plus origination fees by hiding behind a warehouse line. They just don't have a clue.
  • 40 Years in the business | | 22 Oct 2013, 11:27 AM Agree 0
    The focus of the CFPB is off the mark. The legislators who passed this provision were looking for whipping boys and swayed by well healed lobbyists who work for clients that want to eliminate competition. The industry has corrected for its mistakes that let the horses out of the barn in 2006 and 2007. Actually those mistakes were only possible as a result of the wild speculation on Wall Street. Mortgage guys and gals on the street only delivered what regulations made possible and investors wanted. The pendulum has once again over swung center. If our government really wanted to help consumers, let them create effective consumer education vehicles available free on line and in schools and colleges. The only effective prevention of irresponsible lending/borrowing is an effectively informed consumer. The government cannot effectively solve the next problem we will face. What is more their cure for the last serious problem is misguided, swayed too much by power brokers working to gain advantage for their clients whose goal is the elimination of competition. Wake up America!!
  • Wm Matz | | 22 Oct 2013, 03:56 PM Agree 0
    Well said, Mr. Deleva. None of the regulations do anything to ensure that borrowers get [or are even made aware of] the best-suited products or pricing. Only when originators have the education and training to function as co-equal financial advisors with CPAs, attys, CLUs, CFPs, etc. will borrowers have the best shot at getting what they need.

    As to Mr. Bode's comments, borrowers continue to be badly abused by big banks, now that they have eliminated competition through "reform". WFC, BA Citi, JPMC are all 1/2 to 3/4% [or 2-3 pts] higher on FNMA and VA. "Reform" was all designed to give big banks a virtual; monopoly... and they can use all the failed brokers as their mortgage officers without the "protections" applicable to brokers.
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