HW Media connects and informs decision makers across the housing economy. Professionals rely on HW Media for breaking news, reporting, and industry data and rankings. Moving the Housing Market Forward.
CFPBNewsReverse Mortgage

Mortgage Brokers to CFPB Official, Loud and Clear: Please Resign

The message sent this week from the National Association of Independent Housing Professionals to the Consumer Financial Protection Bureau’s Deputy Director Raj Date is clear and simple: Resign.

The association has called for Date’s resignation in light of comments he made at two separate mortgage and banking industry associations—comments that NAIHP says “attack mortgage brokers.”

At recent Mortgage Bankers Association and American Bankers Association conferences, Date spoke of changes to loan originator compensation that the bureau is currently considering.

But his recap of the work of mortgage brokers in the past was biased and unfair, according to the NAIHP, which posted the following comments, made by Date, on its website:

“Let me give you an example from the mortgage bubble: the yield-spread premium. Too often it was the case that mortgage brokers were paid more to give borrowers a worse deal. If a borrower could qualify for a loan at, say, 6 percent, a broker might juice that rate from 6 percent up to 8 percent. As a result, the most important, most visible person in the mortgage process for many borrowers – the mortgage broker – had a financial stake that was confusingly and perversely in direct opposition to the interest of the consumer himself. If people are paid to treat customers poorly, it shouldn’t be surprising when they do.”

“The Federal Reserve Board and then Congress took important steps in this area, and it’s our job at the Bureau to propose and finalize regulations that end these practices. We’re working hard to do just that.”

NAIHP calls for his resignation, as posted on the site.

The CFPB defends its role in protecting consumers and adhering to the law established by the Dodd-Frank Act, and stresses its collection of industry input.

“In his remarks to the ABA, Mr. Date criticized a broken system in which some mortgage loan originators win when consumers lose,” CFPB spokesperson Jen Howard told RMD. “In enacting Dodd-Frank, Congress outlawed the practices Mr. Date discussed for the reasons he explained in his speech. The Consumer Bureau is in the early stages of developing rules to implement this new prohibition and welcomes the input of all stakeholders as it moves through the process.”

Written by Elizabeth Ecker