Mortgage credit still too tight – Cordray

by Ryan Smith11 Mar 2016
Mortgage credit is still too tight, according to the head of the Consumer Financial Protection Bureau – but don’t blame regulations.

In a speech for the Consumer Bankers Association, CFPB Director Richard Cordray said that while credit was too tight, concerns that the agency’s “qualified mortgage” rule would be too onerous have proven unfounded.

“Credit is still too tight, at least in my view, but we can now look in the rear-view mirror and see that some of the undue fears people had about legal liability under the QM rule, or market paralysis due to streamlining the mortgage disclosure forms, can be put in healthier perspective,” Cordray said. “There is ample opportunity in the mortgage market as it continues to heal, and you should be doing what you do best: serving your customers through great deals and great customer service. Homeownership still remains the most effective engine of wealth accumulation for the American middle class, and you are the ones who are making that happen and rebuilding a key marketplace that failed this country so brutally less than a decade ago.”

Cordray said that while mortgage reform in the wake of the financial crisis had been mostly positive, many lenders and consumers overreacted to the meltdown, making it harder for even deserving borrowers to get a mortgage.

“The market crash itself led to many changes, with bad actors and bad practices no longer feasible in a marketplace that had all-too-belatedly exposed the risks inherent in irresponsible and often predatory lending,” he said. “Indeed, if anything, the market meltdown produced an overreaction, marked by very tight credit and historically low levels of consumer demand and available supply. For those of us engaged in the important work of protecting consumers, these developments posed a very tricky task in implementing reforms. We were well aware of the concerns many had raised that the cost of protecting consumers would constrict the availability of credit and even drive many financial service providers out of business altogether.”


  • by | 3/11/2016 11:57:38 AM

    CFPB should be the poster child for a rogue agency. Totally unregulated itself, answering to the Administration only, not to Congress, e.g. the
    PEOPLE. Cordray is interested only in perpetuating himself and his fiefdom
    Congress should restructure or abandon it.
    R Uhl, AZ

  • by C Russell, CA | 3/11/2016 12:08:08 PM

    The CFPB is a consolidation of previously fragmented regulatory oversight by multiple federal agencies. Consumer protection and regulatory enforcement have improved as a result. This has benefitted 'the people'-i.e. individual citizen consumers-immensely.
    Some people, especially those with business interests, prefer a return to the lack of regulation and enforcement that led to the financial crisis, so they can for example push a bad mortgage through the system, make a buck, and leave a mess for someone else to clean up, and for the people-taxpayers- to pay for.

  • by Sickotrid Esq. | 3/11/2016 11:05:30 PM

    What a load of crap. Cordray, please shut your trap - until you've walked in our shoes, you don't know jack. This TRIDisaster is the ABSOLUTELY WORST decision ever made in the history of mortgage lending. Stupid, dumb, expensive, short-sighted, rife with inconsistencies, lack of clarity, a real pain in the tookis - could go on for another paragraph or two. Thanks for turning the mortgage lending industry into a living TRID-fueled hell. The words we want to hear next go something like this: "We are reversing TRID and we are sorry, so very, very, very, very sorry for destroying your industry. Begging your forgiveness." Yeah - I won't hold my breath...


Should CFPB have more supervision over credit agencies?