Sparking indignation in the mortgage broker community, Raj Date, deputy director of the ""Consumer Financial Protection Bureau (CFPB)"":http://www.consumerfinance.gov/ laid the bulk of the blame for the housing crisis on brokers during a ""speaking engagement"":http://www.consumerfinance.gov/speeches/remarks-by-raj-date-to-the-american-bankers-association-conference/ Monday. His statements have led at least one industry trade group to call for his resignation.[IMAGE]
""After all, if you think back to the most problematic vintages of mortgages during the bubble... most of those problematic mortgages were originated not by supervised banks, but by mortgage brokers and finance companies,"" Date said before a group of banking professionals at an ""American Bankers Association"":http://www.aba.com/Pages/default.aspx conference Monday.
Marc Savitt, president of the ""National Association of Independent Housing Professionals (NAIHP)"":http://www.naihp.org/ called Date's comments ""outrageous.""[COLUMN_BREAK]
Date, who comes from a banking background, came to his position at the CFPB ""with a preconceived notion about mortgage brokers,"" Savitt told _MReport_ Tuesday.
And it is this ""preconceived notion"" that Savitt says ""shows me that that's the wrong guy for the job"" and has prompted the NAIHP to call for Date's resignation. (The NAIHP is currently preparing a press release to announce their decision to call for Date's resignation.)
Not only has Date ""energized and infuriated an entire industry,"" according to Savitt, but also Date's claims are simply ""not true,"" according to the trade group president.
Date says incentives are misaligned and that leading to the mortgage bubble, ""If a borrower could qualify for a loan at, say, 6 percent, a broker might juice that rate from 6 percent up to 8 percent.""
The CFPB has been considering mandating a change in loan officer compensation changing it from a percentage model to a flat fee. Savitt believes this ""is a done deal"" already, and it will just be a matter of time before the CFPB implements the change.
However, Savitt insists, citing independent studies from Harvard and Georgetown University that brokers have traditionally helped borrowers receive lower interest rates.
Either way, Savitt says, ""The banks approved these loans, not the brokers.""
While Date speaks of ""transparency, fairness, and proper financial incentives,"" Savitt believes his bias makes him unfit for his role.