CFPB – What Do We Have To Fear?

By: Erik Richard
As printed in the April 2012 issue of The Reverse Review

At a certain point when I was growing up, I simply stopped fearing the boogeyman and checking for monsters under my bed. I know this may sound like a simple way to dismiss the fears many of us have of the CFPB, but the truth is, at this point, they are just that: baseless fears.

I admit, in the past new federal regulations and agencies have tended to confuse borrowers and lenders and increase the budgets of our compliance departments. However, I believe that in the reverse mortgage business, we need to take a step back. We need to tone down the rhetoric, embrace this new agency and help educate their team – especially since they are open to suggestions and constructive input from knowledgeable people in our industry.

Every day I hear somebody verbalize a new fear about what the CFPB is sure to do to ruin our industry and livelihoods. But as of yet, we have no facts or recent actions that remotely back up any of these fears. With the Mayan calendar running out this year, maybe it doesn’t matter either way.  All kidding aside, at the very least let’s watch the agency closely and derive our opinions or predictions from the bureau’s actual actions. In the meantime, let’s lead the way in guiding the bureau as the most ethical segment of the mortgage industry.

The CFPB has launched consumerfinance.gov. I encourage everyone to visit the site and look at the section entitled, “Time to simplify mortgage disclosure.” We can all appreciate how past changes to disclosures and documents have done nothing more than create problems rather than provide so-called solutions. However, if the draft test disclosures namedButternut” and “Hemlock” are any indication, the agency may actually be on the right track. Not only does it look like the bureau is saving a few trees by reducing the number of pages by 50 percent, but I also commend it for creating disclosures that are actually easier to read and understand than past government documents.

It has been some time since I’ve had to roll up my sleeves and personally work with these documents on a regular basis, but so far, I like where the CFPB is taking these and I agree with its intent. Loan officers should compare these new disclosures to what they’re currently using to explain the bottom line to seniors, and consider for a moment that something positive and truly helpful may be going on here.

None of us know what may lie ahead, or the exact effect the actions taken by the CFPB will have on the reverse mortgage industry. However, I do believe the more publicly we protest an agency with the words “Consumer” and “Protection” in its name, the more likely we are to invite criticism of ourselves. After all, we proclaim to be the most ethical segment of the mortgage industry, so do we really have anything to fear?

 

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