Trump-era deregulation sparks mortgage industry optimism

The Mortgage Bankers Association expects regulatory easing in the first months of the second Donald Trump administration to provide favorable tailwinds for the lending industry, its top official said on Tuesday.

With a release from a series of existing and pending rules put forth by financial regulators under former President Biden, the association’s CEO Bob Broeksmit presented “a case for optimism” to members, touting the “quiet progress” it’s made since January.

“We saw an opening immediately after the last election. We quickly reached out to the presidential transition team and had some great discussions. And since the new administration started in January, we’ve had countless conversations with the White House, Congress and key agency staff,” Broeksmit said in remarks at the trade association’s secondary markets conference in New York on Tuesday.

“We have fewer worries of overregulation and policy proposals that hurt the industry and ultimately increase borrower costs,” he later added.

In the homebuilding space, he pointed to the waiver of Department of Housing and Urban Development building requirements for properties constructed on floodplains, as well as the temporary suspension of energy standards introduced by HUD and the U.S. Department of Agriculture last year as positive developments.

“We’re calling for a full repeal, and we’re optimistic that we’ll succeed,” Broeksmit said.

Coming alongside changes, though, has been a gutting of employees working across housing agencies and Fannie Mae and Freddie Mac.

“I think it’s fair to say that not all the cuts have been necessary. But as we’re hearing from those inside the administration, smaller teams will help keep agencies focused on doing their statutorily mandated jobs — and giving you the space to do your job.”

Regularly at odds with the Consumer Financial Protection Bureau under former Director Rohit Chopra, the MBA leader also celebrated the reversal of several Biden-era laws and the overall shifting deregulatory stance the agency has taken this year that effectively quashed its policymaking activity.

Still, Brokesmit acknowledged the need for guardrails.

“While we’re continuing to push for more deregulation, we’re also pointing out that not everything needs to go,” he stated.

“Some CFPB guidance is helpful to both the primary and secondary markets, so it doesn’t make sense to take a sledgehammer to everything.”