The Mortgage Bankers Association (MBA) sent a letter to the Consumer Financial Protection Bureau (CFPB) in response to its request for information (RFI) on how to improve refinancing and mortgage forbearance tools for consumers beyond the short-term pandemic-era programs.
The CFPB published its RFI in late September, seeking public comment about ways to facilitate mortgage refinances for consumers, especially those with smaller loan balances; and ways to reduce risks for consumers “who experience disruptions in their financial situation that could interfere with their ability to remain current on their mortgage payments.”
In the letter, signed by MBA Senior Vice President for Residential Policy and Strategic Industry Engagement Pete Mills, it stated that the MBA and its members “share the broader goal of the RFI to ensure that refinancing opportunities are broadly accessible and regulatory or other barriers do not unduly impact access to affordable and sustainable mortgages.”
The letter discussed “automatic refinance mortgages” and products that could “provide for automatic or streamlined refinancing in the future, when certain market conditions are met.” The MBA raised questions about these product ideas, stating that while “streamlined refinances may be a solution worth exploring [automatic refinances] present many difficult uncertainties and challenges that would be difficult to overcome.”
The MBA also suggested that refis could be improved through policies that “facilitate beneficial subordinate mortgages for consumers seeking smaller loan balances.” It also suggested the CFPB consider changing the qualified mortgage (QM) small loan exemption tiers and reviving QM points and fees cure provisions.