Executive Order on Improving the Availability and Affordability of Mortgage Credit
The White House
This order directs federal financial regulators to reduce compliance burdens and modify mortgage origination, servicing, and capital rules, specifically targeting relief for community and smaller banks with assets under $100 billion.
The primary directive mandates a shift in supervisory enforcement from technical process compliance to evaluating actual ability-to-repay and prudent underwriting, while simultaneously modernizing appraisal and digital closing standards.
The Consumer Financial Protection Bureau (CFPB) is instructed to consider amending Regulation Z to tailor Ability-to-Repay (ATR) and Qualified Mortgage (QM) requirements, potentially expanding the QM safe harbor and modifying points-and-fees caps for small-mortgage loans.
Additionally, the CFPB must review Regulation C to raise the asset threshold for Home Mortgage Disclosure Act (HMDA) data collection exemptions and replace TILA-RESPA Integrated Disclosure (TRID) timing rules with a materiality-based standard.
The Federal Reserve, CFPB, National Credit Union Administration (NCUA), Federal Deposit Insurance Corporation (FDIC), and the Comptroller of the Currency are directed to revise supervisory guidance and enforcement procedures.
Regulators must prioritize correction-first treatment for good-faith technical errors, reserve civil monetary penalties for willful violations, and exclude one-to-four-family residential construction lending from commercial real estate concentration guidance.
To align capital and liquidity, financial regulators and the Federal Housing Finance Agency (FHFA) must evaluate tailoring risk weights for portfolio mortgages and modernizing collateral valuation between the Federal Reserve and Federal Home Loan Banks (FHLBs).
Within 120 days of the order, the FHFA Director must submit a report to the Assistant to the President for Economic Policy and the Office of Management and Budget detailing recommendations to address regulatory gaps in national housing finance markets.
The aforementioned regulators, alongside the Departments of Housing and Urban Development (HUD), Veterans Affairs (VA), and Agriculture, are tasked with modernizing appraisal standards by expanding the use of alternative valuation models, desktop appraisals, and artificial intelligence tools. Furthermore, agencies must promote digital mortgage standards by eliminating unnecessary wet-signature requirements, and the order mandates that the Department of the Treasury will bear the costs for its publication.
