Nothing is clear when it comes to Dodd-Frank and the CFPB

-Housingwire

The Consumer Financial Protection Bureau will open in less than three months but questions about who will head it and what it will do still persist.

Panelists speaking about the Dodd-Frank Act and other regulatory issues involving mortgage finance at the HousingWire REthink symposium going on Tuesday and Wednesday said industry players will see regulation that will evolve over time.

"You will have reinterpretation," said Joe Mason, a finance professor at Louisiana State University and an expert on securitization who has consulted for government agencies, research institutions and the mortgage industry.

"This is a dynamic process and the law is incredibly vague," he said. Mason predicted that it will take five to six years for the regulations to shake out, and said the industry should be prepared for more white papers, studies and appeals concerning the law.

"A lot of this will evolve — maybe not be struck down — but we will find a way to maneuver around."

Michael Waldron, a partner at law firm Patton Boggs, who focuses on regulatory issues, said industry players should develop a culture of compliance.

"Understand the benefit of being proactive instead of reactive. Reactive is always much more expensive," he said, noting that regulators like low-lying fruit and most defense of actions has involved issues such as unlicensed loan officers, unlicensed branches, lack of timely disclosures and consumer complaints that don't get addressed in a timely fashion.

Ed Kramer, executive vice president of Wolters Kluwer Financial Services, said more than 50% of the loans written in the runup of the housing market would not have been written under Dodd-Frank and said the industry lost its footing in terms of following basic underwriting principles.

Ron D'Vari, CEO of NewOak Capital and an investor, said the mortgage industry needs to concentrate on delivering a quality product.

Trust, he said, needs to be regained and investors will come back.

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