UMortgage's Casa: Bad actors are 'taking way bigger risks'
One of the biggest changes in the first 14 months of President Donald Trump’s second term is the reduction in staffing at the Consumer Financial Protection Bureau (CFPB) and its impact on oversight and enforcement in the mortgage industry.
It has become a complicated topic because much of that oversight has shifted to the states. This means brokers and brokerages that operate in multiple states might be dealing with multiple state examiners rather than federal ones.
On top of that, there has been talk that the CFPB may be making a comeback in 2026, as some of the funding to the organization was restored through court cases. In addition, President Trump’s recent housing executive order includes rule-writing that will likely have to occur at the CFPB level.
With the overall picture a bit muddied, there has been talk that some companies and individuals might be taking advantage of the current situation to bend the mortgage rules to their benefit. One mortgage executive is cautioning brokers who might be considering such a plan to think twice about it.
Anthony Casa (pictured top), president and CEO of UMortgage, said he’s heard stories about bad actors in the space trying to take advantage of the shifting enforcement.
“I think for the most part, it's kind of like the wild west out there,” Casa told Mortgage Professional America. “The CFPB has gone away, and I think that there's a sense that people are taking way bigger risks than they have in the past. I am not one of those people. I've been doing this long enough to know that the pendulum swings back.”
Regulation will return
Casa, like so many veterans of the mortgage industry, has seen this script play out before. As different political parties and different administrations come and go, the focus of mortgage oversight and enforcement swings back and forth.
He knows that the pendulum swings both ways, and he wants to make sure brokers know that too.
“Right now we're in a deregulation period, but we're going to be on the other side eventually,” Casa said. When new administrations come in, every four years, eventually, regulation is going to come back. Usually, when regulation comes back, you're not getting in trouble for what you're doing at that time. You're getting in trouble for what you did for the prior four to five years.”
While it may be frustrating for those in the mortgage industry who are doing things the right way to watch others not only bend the rules but do so brazenly, Casa warns that their time will come, even if not right away.
“I think there's a lot of stuff going on right now that is going to be an issue for some of these companies and some of these people down the line,” he said. “I think right now, there's limited federal regulation. I think the states are starting to step up, but there's definitely a void.”
While Casa hasn’t experienced it at UMortgage, he has heard stories about companies and brokers who are getting conflicting messages from examiners from different states.
“We haven't experienced it, but I have heard some of those interpretation issues,” he said. “I think that's where the waters get really, really muddy. We’re almost a nationwide company. We're in 47 states. I think the states are definitely starting to take up more of the enforcement and more of the examination stuff than they were when the CFPB was there. I don't think this story has been fully written. I think we're going to know more over the next 18 months.”
An evolution of enforcement
The cycles of enforcement are nothing new and even predate the financial crisis of 2008 and 2009. Those who got into the industry more recently might not be used to the shifting goalposts that industry veterans see as the normal cycle of government.
“I think for the companies that have been doing this for a long enough time, if you were in the business, pre-financial crisis, and after the financial crisis, you've seen every single cycle,” Casa said. “There's an evolution of policy and an evolution of enforcement. We’ve seen the industry go through it, not just from the Dodd-Frank era, but also, we had TRID, and we had VA churning that penalized a whole bunch of companies.”
In all of these eras, even if regulators didn’t catch these bad actors right away, they often caught up to them years later. Casa believes the same thing will eventually happen to those bending the rules now.
“These opportunistic bad actors, if they do it at any level of scale, at any level that impacts consumers negatively, it is inevitable that it will come full circle,” he said. “The regulators are not going to stand pat for that type of behavior.”
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