The question most people seem to be asking is whether the flat origination fee proposal is going to become law. While I do not have a crystal ball, here is my take on it:
The CFPB is seeking to ingratiate itself to the public (most importantly consumer rights activists, and advocates for affordable housing) without unnecessarily alienating the industry. Hence, in looking at its policy positions it will certainly err in favor of certain consumer groups over the industry, but won't do so when there is little to gain.
Once people really examine the flat origination fee concept, I cannot identify who will support it. Obviously the industry does not like it. But would consumer groups? After all, the effect of a flat origination fee will simply raise the fee of what some borrowers would otherwise have paid and lower the fee of others. Notably, those whose fees would currently be lower than a hypothetical flat fee are the groups that consumer advocates tend to be most concerned with protecting. Thus, a flat origination fee will increase their borrowing cost and reduce the borrowing cost of the "rich." I don't see many consumer groups backing a plan that would have such a result.
Some have argued that a flat origination fee would cause such fees to disappear altogether as a result of competition. I disagree. Origination fees are already disclosed and competition has not eradicated them. Moreover, an origination fee of one or two points isn't terribly difficult to calculate. Even if it was difficult, the exact dollar amount already needs to be disclosed.
Still, such disclosures have not brought origination fees to an end. I don't think further simplifying an already simple fee structure is going to have sufficient market impact to end the practice of origination fees, especially when such fees can just be added into a 30 year note that borrowers are unlikely to "feel."
Going back to the beginning premise, while I anticipate strong industry opposition, I am not able to identify any particular group that will strongly support the proposal. In fact, I could see some consumer groups and advocates for lower income borrowers strongly opposing the proposal due to the fact it will benefit wealthier borrowers at the expense of lower income borrowers. As such, I do not believe the flat origination fee proposal will become law. Of course, I do not have a crystal ball...