It's business as usual in the mortgage space despite the ax taken to a key regulator
A House Financial Services Committee hearing this week described the beginning of a “new era” for the Consumer Financial Protection Bureau (CFPB) after the watchdog’s gutting by the Trump administration’s Department of Government Efficiency (DOGE) in recent weeks.
Chair Andy Barr (R-KY) said that action, which saw a halt ordered to all rulemaking and enforcement activity at the Bureau and top officials placed on administrative leave, had addressed overregulation and overreach at “the most unchecked and unaccountable agency in the entire federal government under the previous administration.”
But Rep. Bill Foster (D-IL) accused President Trump, former interim CFPB head Russell Vought and DOGE chief Elon Musk of “[abusing] their authority to shut down the CFPB and other agencies that Americans rely on for their financial security.”
No clear sign yet of what’s in store for mortgage watchdog
Over a month after DOGE employees “raided” the CFPB headquarters and brought all ongoing work shuddering to a halt, it remains unclear what shape the watchdog – a key regulator of the mortgage industry – will take in its new form.
In the immediate aftermath of the Bureau’s dismantling, mortgage professionals saw little chance of the mortgage market devolving into an unregulated, untamed “Wild Wild West,” and that remains the case, according to William Raveis Mortgage regional vice president Melissa Cohn (pictured top).
Major leadership changes at Fannie Mae and Freddie Mac are raising questions about what’s next for the mortgage giants — and whether the Trump administration is preparing to move forward with privatization.https://t.co/DHQoQRflZS
— Mortgage Professional America Magazine (@MPAMagazineUS) March 24, 2025
She told Mortgage Professional America that nobody appeared to be getting carried away with the prospect of regulatory oversight vanishing in the mortgage industry.
“Less regulation means fewer costs to deal with on the compliance side of the business. But I don’t see that anything has changed yet,” Cohn said. “You would hope that we’d continue as an industry to self-regulate, to make sure that we’re making smart mortgages that will get paid without any compliance issues. From what I see and from what I hear at my company, it’s business as usual.”
That’s partly because Trump’s policymaking blitz, which has seen the president sign a slew of executive orders during his first two months in office to radically reshape the federal government, has fallen foul of judicial oversight in a number of cases and faced lawsuits in others.
The City of Baltimore attempted this month to temporarily block the CFPB from emptying its reserves and returning funds to the government, a bid which was ultimately rejected by a federal judge.
But that’s not to say further suits on the subject aren’t on the way – meaning few in the mortgage industry are jumping the gun on cutting back compliance measures, Cohn said.
“There has been a lot of [government] dismantling and then, ‘Well, maybe you’re not going to be fired,’ or ‘They’re not going to dismantle it,’” she said. “Look at all the lawsuits that have been filed and the pushback from judges. It’s much too early to really tell where everything’s going to end up landing.”
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