Treasury secretary secretary is the director of the CFPB: How will it affect money?
The Conserer Financial Protection Bureau (CFPB) has a new director involved, no one except the Treasury secretary Scott Bessent.
The news was announced today after the shooting of the former CFPB Chohit Chohit at the weekend, who was in charge of the agency since September 2021.
Now it challenges the question what the next agency is born to a major financial crisis (GFC) early 2000s.
The main achievement of CFPB was the creation of the ability to restore / loan (ATR / QM).
Among other things, requirements the applicants of the houses that they do not use to use certified financial information, while preventing hazardous loans such as wrong release.
Why was CFPB created anyway?
It is long ago I said the difference between the first housing market of 2000s and today is the Local Loan Local Laws.
Back at the beginning of the 2000s, you can take a mortgage with zero down while supplying very small security documents.
Often, everything took a credit report to allow for a mortgage. And you can even find the credit points below, less than 620.
The amount of the accident that was set back then was more than pale. Imagine the investor who bought four units without money, 620 Fico points, and zero documents.
And in addition, it takes only a variable rate, or perhaps worse, the negative mortgage loan when the monthly payment did not even cover the lowest interest.
All while home appraisers are not properly managed, leading to high-quality quality payments by looking back obviously without protection.
This is what led to the surfing of the housing market backwards, as well as many banks and lenders from business.
It was so bad that it led to a great change, that is, the DODD-Frank law in 2010. Part of those sweeping changes went out in the construction of the CFPB.
What is the purpose of the CFPB?
In its words, the CFPB was created to “enlarged to respond to government by joining the existing Consumer Protection Authorities throughout the seven orientations.”
Consigned private staff and obligations from a few of the existing agencies, including the Federal Reserve, FTC, FDIC, NCUA, and HUD.
Calling its creation was the fact that “Consumer financial protection was not the basic focus of any Federal Agency,” one agency does not have the tools needed to oversee the entire market.
“The result is a system that has no effective laws or consistent strengthening. The results can be seen, both in the 2008 financial phenership and after.”
The CFPB has made many things since it started cracking from banks and lenders, reducing the credit card fee, reducing the fees payable for credit bureau.
In the world of the mortgage, know that CFPB knows before taking action results in the formation of the measuring loan (this) and closing (CD).
This replaced the limited residence (GFE) area, the truth in exposure (til) disclosure, and HUD-1 to help consumers better understand their loan names and earnings.
They also created and applied ATR / QM law at the beginning of 2014 to ensure that we would not see other catastrophic crisis.
And so far, a person can argue and that you work well, even if there is still unmarried cups there.
What is the new leadership in the CFPB meaning of the housing market?
During this time, it is unclear what will change in CFPB. But workers have been ordered to stop the work.
However, one thing is always clear.
We need to ensure that financial protections are ten or past years remaining in the progress.
The last thing we want is a refund of any consumer protection or return to the fertile loan.
As I said, a lack of high risk market today has observed the housing market to another serious accident, despite illegal income.
If that protection would be deleted, we would return to the problem within a time. That does not mean that this will happen under the new leadership, but something you have to deal with.
Today, it is very difficult to exploit the landlord, or put it in a form of beneficial loan.
This includes thousands of 40s, NEG-AM loan, and previous payment terms, or simply a loan on the householder will not pay.
Hopefully, there is a further protection that is improved if there is a need.
The Key to a healthy housing market, without getting enough, safe and sounding. Without it, we may have a repeat memory soon.
Learn to: Will a housing market crash in 2025?
(Photo: Coindesk)
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