Ditching CFPB Mortgage Rules Would Hurt RMBS, Moody’s Warns
February 27, 2017
If federal policymakers do away with the CFPB’s mortgage rules without proper replacements, the credit quality of residential mortgage-backed securities could be compromised, analysts at Moody’s Investors Service said in a recent report. The analysts were providing a review of President Trump’s recent executive order related to the Dodd-Frank Act. “Any significant repeal of the Dodd-Frank Act’s mortgage-related provisions without effective alternatives would weaken residential RMBS credit quality because these provisions have strengthened the credit quality of mortgage originations, improved servicing practices and bolstered the credit integrity of RMBS structures,” the analysts said. The report is significant because it flies in the face of the traditional industry narrative that the bureau’s mortgage rules have been nothing but an onerous burden ...