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Meet Richard Cordray, the candidate to lead the CFPB

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Richard Cordray is the official nominee to head the Consumer Financial Protection Bureau. If Congress approves the Presidential nomination, he will assume the top spot at the agency. Elizabeth Warren has served as the architect of the new federal regulator, but her potential nomination to lead the bureau was met with fierce opposition from Republicans in Congress. In May, they thwarted a potential recess appointment by deciding not to adjourn. In March 2010, HousingWire magazine published an exclusive interview with Cordray, the then Ohio attorney general, who today heads enforcement at the CFPB. In it, he described himself as "highly dissatisfied" with the current state of mortgage servicing. Cordray told HousingWire of aspirations to continue as Ohio AG, in part, to continue his lawsuits against mortgage servicing firms. At the time of the interview, he had lawsuits pending against Fannie Mae, Freddie Mac, AIG, Bank of America and others. Though he lost a reelection bid, it appears with this nomination, he is exceeding those goals. The CFPB is only days away from officially opening its doors. If Cordray is to lead it, what can the mortgage finance industry expect? In the HousingWire interview, Cordray clearly places blame on poor mortgage originations, the greed of Wall Street and the ratings agencies for creating the Great Recession. He is a foe of foreclosures in most cases and believes all mortgage conflicts can be solved through clear and open negotiations. In response to a question on the predicted outcome of his numerous lawsuits against mortgage servicers, Cordray said: "It doesn't have to be litigated all the way to the end, it could be a consent decree — that they would agree to offer loan modifications on the terms roughly that are being prescribed in HAMP and that they would do it on a clean basis without adding fees and other charges, most of which are unjustifiable." As the Ohio AG, Cordray spent as many as 18 months investigating a single firm and assigned task forces with the mandate to "crack down." Cordray made an ominous prediction on big mortgage servicers during his 2010 HousingWire interview: "We have sued three of them so far; we may have to sue others." As head of the CFPB, Cordray likely will be open to creating a clear path for mortgage customers to file complaints against industry firms and individuals. He calls mortgage servicers to task for not answering the phone and not processing nor correctly filing paperwork. It is a fair expectation that Cordray will demand a higher level of customer service at the CFPB. And he will probably go after the credit ratings agencies, based on comments in the HousingWire interview. "We think that our pensions systems are entitled to compensation for bogus ratings given by the credit ratings agencies that, frankly, were not justified, and were driven by fee-based considerations for the ratings agencies," he said last year. Mortgage servicers grumbled at their treatment at the hands of Cordray while Ohio AG. However, his reputation as an excessive litigator, he said, is unwarranted. "I would characterize myself as a friend of theirs in the sense that we are trying to get them to do what's in their long-term self interest, and we're trying to get them to be responsive to their customers," he said. "I would not characterize us as the enemy," Cordray stated. "I would say that we're highly dissatisfied with their work." Write to Jacob Gaffney. Follow him on Twitter @jacobgaffney.

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