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Mortgage regulators plan shift from prescriptive compliance to risk
At an ACUMA conference, industry speakers said executive orders could broaden access to credit, but rule changes will likely take time due to formal rulemaking.
HousingWire reports that federal regulators are moving away from technical, prescriptive mortgage compliance and toward a framework focused more on risk and actual consumer harm. Speakers at ACUMA’s annual Make Your Mark conference in Las Vegas, including Weiner Brodsky Kider partners Fed Kamensky and Bob Niemi, tied the shift to executive orders directing agencies to review and modernize rules that affect mortgage origination and servicing.
The outlet reports that an executive order issued in March calls for reviews of multiple CFPB-related mortgage rules, including the TILA-RESPA Integrated Disclosure rule, HMDA requirements, ability-to-repay and qualified mortgage rules, loan officer compensation requirements, and servicing and loss mitigation provisions. HousingWire also notes the CFPB has begun implementing the order by issuing a request for information on TRID in July, seeking input on issues such as tolerance limits, timing requirements, and whether certain disclosures could be provided earlier in the mortgage process.
HousingWire adds that the administration is also directing regulators to examine appraisal requirements, including greater use of alternative valuation models and artificial intelligence tools, and potentially reducing appraisal requirements for certain lower-risk transactions such as low loan-to-value and small-balance loans. Kamensky said the most consequential change may be tailoring regulations to community lenders, small banks, and credit unions rather than any single rule revision.
The outlet reports that the shift also includes evaluating supervisory performance beyond technical compliance alone, with greater emphasis on reasonable underwriting and consumer harm. Kamensky noted that downsizing at the CFPB could reduce exams to about 70 annually, while lenders would still need to maintain compliance.