“By creating clear baseline rules that increase transparency for the whole life of a mortgage — from when borrowers begin to shop to when investors are paid the last dollar they’re owed — we begin to create a better system, a more transparent system, a system with more certainty, a system that helps investors actually measure and price risk,” Date said.
Date said that the agency is working to bring enhanced transparency to the mortgage industry, including simplifying federal mortgage disclosure forms and “common-sense rules” that pertain to notifications issued from the mortgage servicer to the consumer.
Date also said that the CFPB is working to build a mortgage market “driven by financial incentives that make sense.”
“There is nothing inherently wrong with risk,” Date said. “Risk—liquidity risk, credit risk, counter-party risk, market risk, interest rate risk—is why financial markets exist. Risk is why you get paid…If you are smart and you take smart risks, then you should get paid. But if you are taking bad risks, then you shouldn’t get paid. For too long, we’ve lived in a mortgage marketplace where people were able to take bad risks and get paid anyway.”
Date expressed confidence in the ability of the mortgage market to bounce back.
“The mortgage market will recover when we have restored transparency, when we have restored fairness, and when we have restored financial incentives that actually reward people for making smart decisions,” Date said.