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Logan Mohtashami talks jobs report, mortgage forbearance

Lead Analyst Logan Mohtashami discusses his recent article on the latest jobs report and the most likely impact on the housing market and mortgage forbearance.

UWM has a plan to win a war of mortgage attrition

UWM's margins will fall all the way down to 75 to 110 bps. Mat Ishbia says it's the perfect environment to prove that his mortgage firm is truly elite.

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Wall Street Journal lays waste to CFPB in scathing editorial

Calls agency an 'offense to constitutional governance'

While the Consumer Financial Protection Bureau is fighting to uphold its authority in a federal court, the governmental agency which so often finds itself in the crosshairs of legislators and the financial industry, finds a new enemy in the form of the Wall Street Journal’s editorial board.

In an editorial entitled “Consumer Financial Protection Racket,” the WSJ’s editorial board takes a blowtorch to the agency borne out of Dodd-Frank and designed to protect consumers.

But, instead of protecting consumers, the CFPB “has complied record of abuse rivaling that of Washington’s most entrenched bureaucracies,” and may be operating outside of the parameters of the Constitution, the WSJ editorial states.

But that’s just the beginning.

The WSJ editorial questions the structure of the CFPB and why so much power is concentrated at the desk of the agency’s director, Richard Cordray.

Cordray’s power is at the center of the court battle taking place at the U.S. Court of Appeals for the District of Columbia Circuit, where mortgage lender PHH is currently challenging the CFPB's $103 million increase of a $6.4 million penalty handed down against PHH over kickbacks.

In court, PHH argued that Cordray “ran roughshod over clear provisions of federal law” when he handed down the $109 million fine against PHH.

“The President and the Congress have no control over this agency,” PHH’s lawyers stated in court. “The only check on this agency is right here, if it isn’t for the judiciary, this agency could do anything it wants.”

The WSJ editorial takes PHH’s points and turns them up to 11.

From the WSJ:

Readers are by now acquainted with the bureau’s habit of claiming racial bias in lending by guessing which borrowers are black based merely on last names and addresses. Last week a federal judge slapped down the bureau for an investigation into college accreditation for which it had no legal authority. Then there’s the recent case of a mortgage company that was following explicit guidance from another federal agency yet was still ordered by the bureau to pay roughly 18 times the amount determined by the bureau’s own administrative-law judge.

The WSJ editorial states that this “egregious behavior” leads to the question of whether the CFPB and its actions are constitutional?

Again, from the WSJ:

But does the bureau really have the authority to conduct such raids on American business? Judges on the D.C. Circuit asked because the consumer bureau is truly something new in Washington: a powerful independent regulatory agency run by a single federal official who cannot be removed from office at the will of the President. The President can only fire the bureau’s director for cause.

So instead of operating with Presidential or Congressional oversight, the CFPB operates independently and without responsibility, the WSJ editorial states – a sentiment shared by Republicans on Capitol Hill.

Again from the WSJ:

The consumer bureau…roams the financial landscape enforcing 18 statutes and bringing actions that can cost hundreds of millions of dollars. It writes rules governing a wide swath of American business, has the power to define what is “unfair” or “abusive” in financial services, investigates companies and imposes penalties.

The whole thing is well worth a read, but here’s the kicker from the WSJ, referring to the judges in the PHH case:

For the sake of liberty and the integrity of the separation of powers, they should strike down this offense to constitutional governance.

3d rendering of a row of luxury townhouses along a street

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