The head of CMG Mortgage has one demand for federal regulators—get busy and give the mortgage industry the new rules and the industry will abide by them.
Christopher George told attendees at the Mortgage Bankers Association convention in Chicago there are unintended consequences with the regulatory (including the Consumer Financial Protection Bureau) rulemaking process that harms the consumer and their access to credit.
But an unintended positive consequence is that the mortgage industry is now creating a better quality loan than they have done in the past. He said the only area of fraud he now is concerned about is occupancy fraud.
His message to regulators: “Settle on the rules and get out of our way.”
George was part of a panel discussion on industry perspectives from community mortgage lenders.
Fellow panelist Gary Acosta, the founder of the National Association of Hispanic Real Estate Professionals and the principal owner of New Vista Enterprises, said the industry has needed better regulation. Whether mortgage lenders like it or not, public policy is critical for getting the nation out of the housing crisis. But now, government needs to focus on stimulating demand.
Surveys show the minority community still has a strong desire for homeownership and there is a great opportunity to help them become buyers.
For these consumers, he said the mortgage is seen as the means to an end, buying a home.
The key for success with the minority community is for lenders to create the point-of-sale relationships with Realtors that they have not done in the past, Acosta said.
Former MBA chairwoman Regina Lowrie, the president of Vision Mortgage Capital, said there needs to be standardization of regulation in the industry. Each regulatory body in the past had its own interpretation of the rules. But by having a single regulatory body in charge, like the CFPB, she said, “it could be good for the industry.”
George pointed out the benefits of running a referral-based business. Originators spend a lot of money acquiring customers; by being able to leverage these relationships for more customers, “it builds on itself.
“It is the personal touch” in marketing to these customers that helps to build relationships, he said.
John Johnson, president and chief executive of Mortgage America, said the small and midsize mortgage lenders have a brighter future than their larger mortgage competition. They are more nimble that the larger players and they can move and adapt to changing conditions in the marketplace, he said.
George said mortgage lenders need to come up with new ways to help the consumer get to the point where the consumer wants to be.
“Let's stay focused on where we're at and where we're trying to go,” and not get distracted.
Today's business environment is stressful but there is opportunity for lenders, added Johnson.
When asked about repurchase requests, Johnson complained about a lack of rationality. He spoke of a loan that had a title issue which would have been covered through insurance.
But that title problem violated the reps and warrants and the investor wanted the loan repurchased.
Going forward, loan buyback requests could cast a pall on the marketplace and could delay the recover even further, he said.
Lowrie added lenders are now doing more prefunding quality control than before. This increases the cost to consumers.
