Mortgage attorney explains what brokers need to keep on their radar in the months ahead
While the Consumer Financial Protection Bureau (CFPB) may look much different after it is downsized, it still has several mortgage-related issues in its sights. A mortgage attorney said the agency still has a list of mortgage industry issues on its agenda.
Peter Idziak (pictured top), senior associate and mortgage attorney at Polunsky Beitel Green, said one of the things brokers should keep an eye on over the next few months is changing or ending regulations.
“One of the areas of the CFPB, one of the departments that has still been active is their regulations and rule writing,” Idziak told Mortgage Professional America. “Because there are several regulations that the industry would like to see either revised or rescinded.
“There is generally a process under the Administrative Procedures Act that you have to go through to rescind a regulation. You can’t just pronounce it and then it’s rescinded.”
Servicing rules and LO compensation
Idziak said that mortgage servicing rules and loan originator (LO) compensation are two areas where everyone expects to see some changes, even if they’re not sure what they will be yet.
“There are areas where the industry would like to see revisions and updates,” Idziak said. “There was that announcement of one of the mortgage servicing rules. And then ‘LO comp; rescission,’ which no one really knows what that means.”
The CFPB submitted five rulemakings to the Office of Information and Regulatory Affairs (OIRA), which included the LO comp rescission and discretionary mortgage servicing rules under Regulation Z, and discretionary servicing rules that fall under RESPA (Real Estate Settlement Procedures Act) under Regulation X.
While the text of the rules was not made public, Idziak said many want policies to be updated to keep up with changes in the industry or clarifications to existing rules.
“The mortgage servicing rules are an area where industry would like to see them updated to meet today's current market,” he said. “And LO comp is a rule that the industry would like to see clarified in a lot of areas, and revisions to it to be more consumer friendly. Because there are so many limitations on when loan originators can reduce their compensation, which you know, ultimately kind of harms borrowers, because they end up paying more.”
The National Association of Mortgage Brokers (NAMB) released a statement discussing its opposition to the “current rigid interpretation of the Loan Originator Compensation regulations that restrict the flexibility mortgage originators need to best serve their clients.”
“NAMB advocates for a return to common-sense regulatory approaches that distinguish abusive behavior from today’s transparent and consumer-focused lending models,” said Jim Nabors, President of NAMB. “Responsible use of lender-paid compensation is an essential tool in offering flexible, borrower-centric financing options. We urge regulators and lawmakers to update and align LO Comp rules with the realities of today’s transparent and competitive mortgage market to protect, rather than hinder, consumers.”
Enforcement and supervision
Idziak said to expect a shift in the type of enforcement and supervision the CFPB carries out, especially if there is a massive downsizing in the organization.
“I think we've seen from the Bureau's actions with existing enforcement actions that they intend to really reduce the number of enforcement actions they're bringing,” he said. “In their 2025 enforcement and supervision priorities, they indicated that they're going to focus on actual fraud and avoid the advance of these novel legal theories that they feel the previous administration has done.”
In addition to reduced enforcement and supervision, Idziak expects a shift in where more of the oversight will take place.
Mortgage fraud risk has significantly increased year-over-year, despite leveling out recently, according to Cotality. Matt Seguin, Senior Principal of Fraud Solutions at Cotality, links higher interest rates to a rise in transaction-related fraud. https://t.co/uQy6MYWEhP
— Mortgage Professional America Magazine (@MPAMagazineUS) July 1, 2025
“They’ve indicated that they're going to reduce supervision, reduce examinations, by about 50% overall, and shift back to depositories,” Idziak said. “You'll see that as a shift in the future in the ratio between Independent Mortgage Banks (IMBs) and depositories. It shifted over time, from banks initially, now more towards IMBs, and it looks like it's going to shift back.”
Regardless of how much the CFPB shrinks or what side of the banking world draws its greatest focus, Idziak warns mortgage brokers that he expects mortgage lending to still be a major point of emphasis.
“The bureau did indicate that mortgages are going to remain one of their highest priority areas,” he said. “So, to the extent that you do have a slimmed-down bureau, mortgages will still be an area of focus for them. Until you see a statute or a rule change, the law is still the law, even if you may have fewer cops on the beat at the moment.”
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