Mortgage Overregulation Hinders Industry, Survey Shows
Approximately three-quarters of mortgage industry professionals believe that today’s regulatory environment prevents them from lending to creditworthy borrowers, according to a survey released by Washington, D.C.-based business advisory firm The Collingwood Group on Thursday.
In Collingwood’s October 2015 Mortgage Industry Outlook Report, the firm posed the question, “Is today’s regulatory environment preventing you from lending to people you think can afford and deserve a mortgage?” to a group of mortgage industry professionals that included mortgage lenders or originators, vendors or service providers, the secondary market, mortgage industry trade association/advisors/consultants/attorneys, servicers, and those in government. About 80 percent of the professionals surveyed were originators or lenders.
About 75 percent of the group surveyed said the current regulatory environment is indeed preventing them from lending to consumers who can afford and deserve a mortgage, while 25 percent said today’s regulatory environment does not prevent such lending. One anonymous respondent said, “We punish the whole for the actions of a few.” Yet another anonymous respondent said, “I believe there are many loans we do not do now that we would have closed in the past that were fantastic loans with common sense underwriting.”
The topic of whether or not the mortgage industry has been overregulated in response to the 2008 crisis has been the subject of much debate among lawmakers, mortgage industry professionals, and other industry stakeholders. On Monday, Comptroller of the Currency Thomas Curry announced in an address in Chicago that the OCC was advancing three specific legislative proposals aimed at eliminating regulatory burden on community banks and financial institutions. On Wednesday, the House Financial Institutions and Consumer Credit Subcommittee discussed a series of bills aimed at providing regulatory relief for Main Street. Several of those bills have received bipartisan support.
“Imagine how well this engine of the economy could do if government just kept its hands off.”
—Tim Rood