CFPB set to begin 5-year review of mortgage rules


Earlier this week, Chris D’Angelo, the CFPB’s Associate Director of Supervision, Enforcement and Fair Lending, discussed the CFPB’s plans to initiate its review of major mortgage regulations, including the qualified mortgage rule which established standards for lenders to follow to ensure that borrowers have the ability to repay their mortgages.

According to the Dodd-Frank Act, the CFPB must assess all of its rules five years after they take effect to ensure they are accomplishing the objectives of Dodd-Frank as well as the impact on financial institutions and consumers. The qualified mortgage rule and other significant mortgage regulations took effect in January 2013.

During an American Bankers Association meeting in Washington, DC, Chris D’Angelo said that the CFPB is “embarking upon now the beginning of an assessment process for our major mortgage rules.” D’Angelo also explained that the CFPB would assess the “real-world effects” that the rules have had on the mortgage industry and whether the rules “had the effect which was intended, what the costs were, whether there’s some tailoring that would make that more effective.”

D’Angelo noted that the CFPB continues to receive complaints related to the mortgage servicing industry despite extensive regulations intended to benefit consumers. D’Angelo also noted that many of the problems were due to third-party service providers rather than mortgage servicers themselves.