PERSON OF THE WEEK: Love it or loathe it, the Consumer Financial Protection Bureau (CFPB) appears to be here to stay for the forseeable future. With the CFPB's first anniversary of operations coming up in July, MortgageOrb spoke with Cathy Blaszyk, vice president of lender services at La Jolla, Calif.-based ClosingCorp, to grade the bureau's initial endeavors.
Q: Many people in the mortgage banking industry were originally wary of the CFPB's role. To date, have the industry's worst fears been justified, or is the CFPB working to enable a healthy relationship with mortgage bankers?
Blaszyk: It's human nature is to fear the unknown, and there is no exception to this when anticipating new rulings and audits from the CFPB. There are still too many unknowns involved as they relate to the CFPB's policies. I have spoken to several compliance officers of tightly run organizations that are truly apprehensive about their impending audits. Many fear the CFPB will look to find fault and make an ‘example’ of a lender in their audit findings. Justified or not, that is the current mood.
Q: When Richard Cordray was named CFPB director in a Jan. 4 recess appointment, a number of people and organizations openly questioned the constitutionality of the appointment – and there was some talk of taking the matter to the courts to rule on the legality of the appointment. To date, however, no one has brought the issue to the courts, and no one is talking about the legality of the appointment. To what do you attribute to this dramatic turnaround?
Blaszyk: Truly, after several years of intense regulatory changes, I think the industry as a whole is worn down emotionally and financially. Significant resources have already been spent to support the regulatory changes to date.
Most companies do not have the resources to challenge Dodd-Frank, the CFPB or Richard Corday's appointment. Among industry professionals, there is a tone of just accepting the current regulatory environment because they must focus attention and resources on meeting the upcoming requirements to ensure their organizations remain compliant.
Q: How would you rate the CFPB's progress in making mortgage-related documents more user-friendly for consumers?Â
Blaszyk: I would have to give the CFPB an ‘A’ for the efforts it has made thus far. It is very challenging to condense a large amount of information into one document that the average consumer can easily comprehend. I have been impressed by the CFPB's extensive testing of prototypes across the country and effort to obtain feedback.
Q: If you were given the CFPB's responsibility of rewriting the good-faith estimate in order to make it more user-friendly, how would you go about doing that?
Blaszyk: That is a tough question. These are the consumers' main concerns: What is my interest rate? What are my monthly payments? How much cash do I have to bring at closing? And, do I even qualify?
Beyond that, I believe it becomes too overwhelming for many. We've got to keep it simple for the consumer. The old itemized fee worksheets used by so many platforms in the past had all information clearly displayed in one legal-sized page. If you could only add the terms of the mortgage and how it adjusts to that page, I think we would have a winner.