Right now, Raj Date, deputy director of the Consumer Financial Protection Bureau, isn’t popular among loan brokers and their backers. Twenty-four hours ago the National Association of Independent Housing Professionals officially called for his resignation after he told a commercial banking group that most of the “problematic mortgages” of yesteryear “were originated not by supervised banks, but by mortgage brokers and finance companies who then sold those loans into capital market execution on Wall Street.” Brokers realize that getting the history of the mortgage crisis correct is key to both setting the financial record straight and the future survival of independent third-party originators. But based on public comments made by most CFPB officials, you get the sense the young agency sees devil horns on all brokers and halos on bank LOs. If brokers disappear entirely – and we don’t think they will – the entire front end of the origination market will be in the hands of depositories, which means consumer choice will be severely lessened. If CFPB is successful in killing nonbank brokers who’s to say the agency won’t go after nonbank servicers next? That would mean all those REITs buying MSRs might be in danger.
