The Financial Regulatory Improvement Act of 2015 sponsored by Senator Richard Shelby, R-AL, was recently passed out of the Senate Banking Committee, chaired by non-other than Senator Shelby, himself. This is the first step in the long journey toward full passage of the Bill by the Senate and then the House. Will it make it? If so, will it be the same Bill that came out of the Senator’s Committee?
Some good stuff for all mortgage lenders…
- Temporary 120 day transitional license for originators moving from Banks or from state to state (well, maybe not so good for banks)
- Clarification on the exclusion of escrow/impound items from the 3% fee cap
- Removal of the 3 day waiting period for closings under TRID when the only change is reducing the interest rate.
- Reprieve from CFPB enforcement actions for TRID violations until CFPB confirms the new rules do not conflict with state laws.
Other provisions deal with a safe harbor for bank portfolio loans. I’m not quite sold on that one yet. They call for a little something for everybody:
- An impact study on the effects on mortgage servicing rights from Basel III
- Guidelines for the disposition of Fannie and Freddie
- Prohibitions on the use of their G Fees and the sale of their stock, unless directed by Congress.
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The main thing is that something is finally moving toward some regulatory relief for mortgage lenders. This is a great first step in the right direction. Now, we need to ensure we step carefully. With the crash of 2008 and resultant Great Recession, massive changes were made in how mortgage lending is done. Some good and some not so good.
It’s time to carefully review these changes to weed out those that hinder the process while retaining and possibly improving upon those which help. The challenge is determining which is which. That takes time, careful analysis, compromise and leadership; things which all too often are missing from the current legislature.
Senator Shelby says this is just the beginning. The Bill is a working document that will most likely include more changes as it moves through the process. Let’s hope these are changes for the better to continue consumer protections while removing barriers to prudent lending.
Hopefully everyone will work together to help more Americans realize their dream of owning a home. That will build strong communities, which is the foundation for a better society and a strong Country.
Senator Shelby and his Bill still have a few more hurdles to clear. Hopefully he’ll run a good race.