Former CFPB official's controversial company could launch mortgages within months

by Adam Smith08 Apr 2014
A former CFPB official who faced criticism over the launch of his own business is preparing to enter the mortgage lending market in earnest.

Former CFPB deputy director Raj Date faced criticism last year when he departed the regulator to found mortgage lending and business advisory firm named Fenway Summer LLC. Now The New York Times has reported Date's company plans to announce a merger with Ethos Lending, allowing it to start home lending within a few months.

The combined firm will be branded Ethos Lending, The Times said, and would deal in non-QM loans. Date said the merger would allow Fenway Summer to accelerate its timetable for entering the mortgage market.

“We had been looking for the right platform to acquire that would essentially allow us to get into the market faster and at a better scale. If we could wave a magic wand and accelerate our own entry by six months, nine months a year, what would it look like? It would look like this,” Date said.

Date's move into private business has drawn the ire of House Financial Services Chairman Jeb Henserling, R-Texas and House Oversight and Government Reform Committee Chairman Darrell Issa, R-Calif., who sent a letter last year to CFPB director Richard Cordray expressing concern that Date's company would deal in mortgages that fell outside the QM rule, a rule Date helped craft. But Date has dismissed such concerns, The Times reported.

“There’s no special QM loophole written in invisible ink that only I can see. There is no secret key to the mortgage kingdom. We’re going to compete like I hope everyone does: play by the rules, make great credit decisions, deliver great customer service.”

COMMENTS

  • by Brad | 4/8/2014 1:17:13 PM

    Wait, you mean the Dodd/Frank didn't cover every possible loop hole?
    Maybe congress should consider consulting with people in the actual business of mortgage origination before constructing legislation outlining the rules of its practices.
    Good for Date - hope it brings some Great products to market!

  • by Michael | 4/8/2014 2:05:34 PM

    This is what happens when the fox guards the hen house.

  • by Mary | 4/8/2014 10:27:29 PM

    These guys got the system all figured out! They get into government "to protect the people", craft dubious laws for every one else; then they go to the private sector set up business that circumvent the very laws they help craft. The amazing thing is No one questions the practice. So, have Government and Corporations merged?

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