Donovan Eyes Mortgage Regulatory Reform

Department of Housing and Urban Development secretary Shaun Donovan wants to "rethink" every aspect of the nation's housing finance system so it can serve consumers better and make the regulatory structure less burdensome for lenders. "I fundamentally believe that the system we have today does not adequately serve consumers, but also makes the lending process more complex, more onerous and gets in the way of you doing your business," the secretary told a Mortgage Bankers Association conference held in Washington. He specifically noted that the Real Estate Settlement Procedures Act and the Truth in Lending Act regulatory structures needed to be reviewed. "We have an opportunity to simplify the regulatory system in a way that benefits consumers and benefits lenders at the same time," Mr. Donovan said. He also said HUD must focus on ensuring the Federal Housing Administration single-family program is free from fraud and abuse. And he wants FHA to look ahead and consider pool insurance and promoting energy-efficient and location-efficient mortgages.