CFPB Gears Up to Examine Mortgage Firms
Wall Street Journal
January 11, 2012
Randall, Maya Jackson
Now that the Consumer Financial Protection Bureau is up and running, thousands
of non-bank mortgage lenders and brokers are being tapped for in-depth,
government review of everything from their advertising practices to their loan
volume. In its new "Mortgage Origination Examination Procedures" guide, the
agency outlined how its examiners will evaluate the nonbank mortgage firms,
beginning within a few weeks. The recent appointment of the bureau's first
director, Richard Cordray, has set the wheels into motion to regulate the
nonbank financial industry. Consumer advocates claim nonbank mortgage lenders
contributed to the housing collapse in 2008. "The mortgage market cannot work
well for consumers if the spotlight shines only on one part of it, while the
rest is left in darkness," Cordray said. "Our supervision program will
illuminate the entire marketplace by making nonbanks play by the same rules as
the banks." Critics of the agency counter that banks and nonbanks should not be
treated the same since nonbanks are not federally insured, nor do they use
depositors' money to make loans.
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