CFPB retreat may only go so far to ease mortgage rules
WHITE PLAINS, NY — Although the Consumer Financial Protection Bureau is loosening certain mortgage rules, other types of industry regulation will likely persist as they are or even tighten, according to industry attorneys.
LO comp rules are probably "here to stay," Wayne Watkinson, an attorney and partner at law firm Offit Kurman, told attendees at the New York Association of Mortgage Brokers conference here, when asked whether they are likely to be rolled back.
In addition, states continue to "fear that there may be a void" as a result of the CFPB's rollback and are likely to continue to tighten regulation in response, said Bonnie Nachamie, an industry attorney in private practice.
New York, which has some of the most detailed business continuity and cybersecurity rules in the nation, continues to take a particularly close look at industry websites, and the waiting time for website approval in the state can take up to six months, the two attorneys said.
While mortgage companies continue to have to contend with such regulatory constraints, they may get some relief from CFPB reforms like the bureau's proposed loosening of QM standards.
Continuing regulatory costs and lower volumes have helped ensure that mortgage brokers, which remain a low-cost means of sourcing loans compared to other origination channels, remain attractive to lenders.
The broker model is still "becoming stronger," said Art Saitta, a residential business development officer responsible for secondary marketing and product development at Ridgewood Savings Bank.
Wholesale lenders continue to be able to typically manage broker originations with a "relatively modest staff," Watkinson noted.