The Consumer Financial Protection Bureau’s New Rules

Written By: Frankie Lacy, Op-Ed Writer

One of the hottest topics in the mortgage industry today is the Consumer Protection Financial Bureau’s (CFPB) sweeping regulatory reforms. Many are questioning how the new rules will impact the industry and whether the reforms are positive or negative. Some have concerns for our ability to remain productive and profitable with so many new restrictions.

It is true that the CFPB’s new rules will change the way the mortgage industry conducts business in a few important ways. However, many of the rules simply reiterate practices already in place for most mortgage lenders. Most of us are already registered with the Nationwide Mortgage Licensing System and Registry (NMLSR). Many loan originators have already become licensed and taken trainings on the federal and state lending laws.

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The ability to repay and qualified mortgage underwriting standards are, for the most part, right in line with the way underwriters decide creditworthiness today. Evaluating credit history, employment stability, income continuance, and debt to income ratios are a part of our everyday function. In addition, automated underwriting systems have improved drastically over the last six or seven years to evaluate risk at a more sophisticated level.

The primary goal of the CFPB is to provide transparency, education, and options to consumers as they make mortgage financing decisions. I believe this is a positive step that will lend credibility and professionalism to the mortgage industry. The ability to repay, qualified mortgage, and loan originator rules in particular create a greater demand for ethical, knowledgeable, and responsible people to fill the roles of mortgage professionals. In the long run, this move will inspire consumer confidence and once again make home buying and mortgage financing major life decisions that require a professional opinion for the best results.

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These new rules will take the industry in the same direction as accountants, insurance agents, and financial planners. We will begin to move away from the “used car salesman” stigma toward an image as highly trained professionals that can be relied upon to help consumers make the best long-term financial decisions possible. These changes will require all of us, from origination and processing to underwriting and closing, to dig deeper and learn more about personal finance and creditworthiness. In the end, we will be equipped to make better lending decisions in the best interest of the client and for the stability of our industry and the economy as a whole.

For more information about the CFPB’s new rules, sign up for the Mortgage University’s training: CFPB 2014 - "New Rules Defined" here:

About The Author

Frankie Lacy - As an op-ed writer, Ms. Frankie Lacy is a 15+ year mortgage industry veteran with extensive conventional mortgage underwriting experience. Topics of Frankie's expertise include: Fannie Mae, Freddie Mac, USDA Rural Housing, underwriting to investor overlays, self-employed borrowers, personal and business tax return analysis, rental income, condos/co-ops/PUDs, and more. Frankie is a Davenport University graduate with a degree in Business Administration.


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