U.S. Housing Finance System Needs Reform
This will be my number one priority in my first 100 days. With over 27 years of experience in Mortgage Banking, I'm the one to finally get it Mortgage Reform Passed in the House. My pledge to you is I'll reach across the aisle and obtain a bipartisan Mortgage Reform Bill.
If certain mortgage lending and servicing reforms were put in place, there could be an increase of $200 to $400 billion in originations per year.
An analysis of the mortgage market shows that the current lending environment cost at least $1.5 trillion in mortgages over a five-year period that could have been originated if reforms had been enacted.
Reducing onerous and unnecessary origination and servicing requirements (there are 3,000 federal and state requirements today) and opening up the securitization markets for safe loans would dramatically improve the cost and availability of mortgages to consumers – particularly the young, the self-employed and those with prior defaults. This has become a critical issue and one reason why banks have been moving away from significant parts of the mortgage business.
The cost of originating and holding loans has increased significantly since the housing crisis, making it difficult for some lenders to stay in the mortgage business. these significant issues, we are intensely reviewing our role in originating, servicing and holding mortgages. The odds are increasing that Banks and Mortgage Banking Companies will need to materially change their mortgage strategy going forward.
My Position -
Efforts to protect consumers from abusive lending practices should not prohibit responsible, though unconventional, loan products created to meet the diverse needs of consumers, including lower-income borrowers, self-employed, borrowers in rural and underserved communities, and first-time homebuyers.
ICBA is encouraged by recent proposals from the regulatory agencies to increase the threshold for the use of property evaluations for loans retained in a portfolio. ICBA also supports efforts by the appraisal industry to ensure sufficient access to appraisers, particularly in rural areas.
Ability to repay (“qualified mortgage”), Home Mortgage Disclosure Act (HMDA), escrow rules, and appraisal requirements have been significantly improved through legislative and regulatory action. These changes will help make mortgage lending more attractive to community banks.
I will strongly encourage the CFPB to continue to collaborate with industry leaders and Congress to take a commonsense approach to amend TILA/RESPA Integrated Disclosure (TRID) rules, including certain tolerances and timelines. Consumers should be allowed to waive the 3-day waiting period between receipt of the final closing disclosure and consummation. I will urge the CFPB to address compliance questions through written, authoritative guidance and FAQs.
The CFPB’s small servicer exemption limit should be increased from 5,000 loans to the higher of 30,000 loans serviced or $5 billion in total unpaid principal balance of mortgages serviced. Moreover, to be fully beneficial, an increase in the limit must be accompanied by corresponding relief from the punitive capital treatment of mortgage servicing assets (MSAs) under Basel III. I will call for a complete exemption from Basel III for all community banks.
The CFPB should address servicing issues such as the prohibition on initiating foreclosure actions on uncooperative borrowers for loans that are perpetually 90-days delinquent.
I strongly support the provision of S. 2155 exempting certain institutions from collecting and reporting expanded HMDA data fields. I will continue to work with the CFPB as it re-proposes parts of the HMDA rule to expand relief from collecting and reporting all HMDA data for smaller institutions.
It's encouraging by recent proposals from the regulatory agencies to increase the threshold for the use of property evaluations for loans retained in portfolio. The industry also supports efforts by the appraisal industry to ensure sufficient access to appraisers, particularly in rural areas
Community Banks Are Responsible Lenders
As relationship lenders who underwrite based on firsthand knowledge of their customers and communities and who thrive based on the strength of their reputations, community banks have every incentive to make fair, common sense, and affordable loans. They do not need prescriptive regulations to compel them to do so.
Portfolio Mortgage Lending Should be Exempt from Onerous Regulatory Requirements
I applaud recent legislation that expanded safe harbor QM status for loans held in portfolio by community banks with assets of up to $10 billion. This legislation also provided relief from mandatory escrow requirements for institutions with $3 billion in assets or less. Mandatory escrow requirements raise the cost of credit for borrowers who can least afford it and impose additional, unnecessary compliance costs on community bank lenders.
Small Servicer Exemption Limit Must Be Increased
To preserve the role of community banks in mortgage servicing, where consolidation has clearly harmed borrowers, the CFPB’s small servicer exemption limit should be increased from 5,000 loans to 30,000 loans or a maximum principal balance of $5 billion in mortgages serviced. The new regulation has approximately doubled the cost of servicing with a direct impact on the consumer cost of mortgage credit. Community banks above the 5,000-loan limit have a proven record of strong, personalized servicing and no record of abusive practices. To put the 30,000-loan limit in perspective, the five largest servicers service an average portfolio of 6.8 million loans each and employ as many as 10,000 people each in their servicing departments. The top five mortgage servicers each have more than $300 billion in unpaid principal balance on mortgages serviced. The full benefit of increasing the small servicer exemption limit cannot be realized without corresponding relief from the punitive capital treatment of mortgage servicing assets (MSAs) under Basel III.
With the help of the Real Estate Community donating to my campaign will increase my base and get me elected.
Mark Richardson For Congress 2020
Decorated United States Navy Veteran
Paid For By Mark Richardson Committee To Elect
