CFPB Head Considering Using Dodd-Frank to Unwind Mortgage Rules

The Dodd-Frank Act required affected agencies to review whether significant rules were functioning as intended. The efficacy evaluation of mortgage underwriting and servicing rules, executed in 2013, is likely to help Acting Director Mulvaney of the Consumer Financial Protection Bureau (CFPB) dismantle them, according to an article in Asset Securitization Report. The law specifically states that the CFPB can "modify, expand or eliminate" a rule under the purview of the 'look-back' review. One example observers have pointed to is the qualified mortgage rule, which could be drastically expanded to encompass more mortgages. The servicing rule, which took effect in 2014, is also being reconsidered. This added new mortgage servicing requirements, such as early intervention with delinquent borrowers, continuity of contact with delinquent borrowers, and loss mitigation procedures. According to one estimate, servicing costs for a non-performing loan increased by 350% as a product of the new rule, which has raised the possibility of its elimination.

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