On Tuesday, October 25th, Richard Cordray, the Director of the Consumer Financial Protection Bureau (CFPB), spoke to the Mortgage Bankers Association (MBA) at their annual convention in Boston.
Director Cordray began by acknowledging the financial crisis of five years ago, and credited MBA with doing the hard work of extending credit to Americans at a time when economic activity was greatly impaired by extreme financial conditions. He highlighted the intense scrutiny that MBA has been through in order to diagnose exactly what happened, from both within and without its own ranks. He acknowledged that aspects such as foreclosures, delinquencies and underwater mortgages have steadily declined, but h highlighted that millions of financial consumers still feel the effects of the crisis, particularly communities of color. A specific example of this is the lack of access to credit for everyone, and required credit scores for home purchase being above historically normal levels.
Cordray went on to highlight the gains that have been made in the financial market since the crisis, and affirmed CFPB’s belief that their work in this area has played an important part in those developments. He positions this against the subsequent compliance costs being felt by the mortgage industry, saying that “no economic sector that precipitates a global financial meltdown could possibly expect to escape far-reaching reforms, as Congress so dictated.”
The CFPB’s bottom line in this speech is that the mortgage industry has come a long way in a short time, achieving immense tasks which put the market in much better shape. He attests that under the new rules, home values are on the rise and millions of homes continue to resurface from underwater loans. “We are able to reaffirm that homeownership is still the most effective engine of wealth accumulation for middle-class Americans,” Cordray said. He credits mortgage bankers’ efforts to grow their businesses with rebuilding this key market and now contributing strongly to our economic recovery rather than holding it back.
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov