Employment, again, a bill that passed with significant bipartisan support in the United States senate. We see no reason why it could not be passed. If it was put on the floor, we think it could get bipartisan we think ad significant number of republicans in the and democrats would be for it. We would like to see a greater investment in infrastructure and job creation. The American Public that ought to be our number one priority. Those are just some of the issues that we would hope would be addressed and that we could accomplish in the second session of the congress. Thatu can see all of interview with maryland congressman steny hoyer tomorrow when newsmakers airs at its regular time 10 00 a. M. And 6 00 p. M. Eastern here on c span. I think that there is a way in which we have set up this impossible series of expectations, especially for our president s, but for elected officials as a whole, that they are going to come in, swooped in, save the day, and when it does not happen, we give congress the 9 Approval Rating in the president 39 Approval Rating. Expectations have to be lowered, and that is part of what is really quite amazing about the american founding. It is not that the founders themselves said, dont expect much from government. It is, government is not going to be the main driver of our liberty. It is going to be civil society. The federal government exists to do certain things, and it better do them well. If it does not do them well, nothing else will be properly situated, but the main area of activity is going to be in the private sphere, in civil society, and in the election of local officers and the carrying out of duties at the local and state level, and there is even in that, i think, a measure of modesty, of recognizing that it is not possible for people from washington, d. C. , to run a nation of 310 million people. Onavon bob david bobb , sunday night on c spans q a. Consumer Financial Protection Bureau joins executives from the National Association of realtors to talk about housing policy and new lending rules that recently went into effect. This is an hour and a half. Good morning. I am the 2014 president elect of the National Association of realtors. Onlyng around, im the practitioner in here that actually lists themselves real estate for a living. I have been doing that for 25 years. I live in Hot Springs National park of arkansas. Each of you for helping the National Association of realtors start the year off. Ith this discussion today we are going to talk about the to payroll. We are going to talk about mortgage lending and what effect the consumer Financial Protection Bureau new rules coming into effect this friday might have on that process. Its an issue thats very important to the real estate industry. It is also very complicated. People have worked long hours to sort out the implications of specific language designed to improve the loan experience for consumers. Through it all, there has been a common goal to ensure Consumer Protection from risky loans but maintain their ready access to credit a tough balance. We have been very involved in shaping the debate surrounding as for theas well important qualified mortgage provision as well. To give you an idea of how we got to where we are today, i thought we all we ought to do. Little background following the financial crisis related to mortgage lending, lawmakers passed and this is a mouthful the dodd frank wall street reform and Consumer Protection act. We have shortened that, thank goodness, but it was signed into law in july 2010. Its purpose was to strengthen the Regulatory Environment and to protect consumers. As written, the rule includes and says provisions that lenders must make responsible, good faith determination that a mortgage is andrdable to the consumer, thats why it is commonly referred to as the ability to. Epay rule it sounds simple, and you would not think it would have needed a law to tell lenders they should make a borrower be able to repay before they lend the money. When i was a lender, we called that banking 101. But it back to the crazy loans. Ade back in 2004, 2005, 2006 you can see why such a rule may have been necessary. Policy supporting this concept went back as far as 2004. To be a qualified mortgage and receive safe harbor protection, the loan must have relatively low points and fees and must follow a number of underwriting guidelines. They must not contain risky features such as interestonly payments or payments that are less than the full amount of so that the borrowers debt might increase as the loan progresses. It cannot exceed 30 years as far as a term. Finally, the borrowers debt to income ratio must not exceed 43 of their gross income before. Axes certain government issued loans, such as fha, you probably know, that are insured by fha are exempt. There is, however, one additional area where we have concerns. Ande a qualified mortgage the seat safe harbor protection, fees and points cannot exceed dirty three percent of the total loan amount. The problem is that under this rule, affiliated and non affiliated firms are treated differently. It is our view that this would be a disadvantage to many real estate affiliate lenders and, more importantly, reduce the available to consumers of where they can get a mortgage. Lender the unaffiliated must be have the filing company, the bottom line is the consumer will still pay the same fee. Mortgage backers have affiliated with affiliated Companies Involved in the transaction have to count more items toward fees than our large Financial Institutions such as Title Insurance charges, escrow for homeowners insurance. It is our view that this would disadvantage many real estate affiliated lenders, thereby again reducing the choice to consumers of where they can go get that mortgage. The Mortgage Choice act introduced by both the house and senate, would address this issue. It would, in our opinion, level the playing field. By not counting the affiliated title these toward the three percent cap, the same way the unaffiliated title fees are. Reated it would also remove being the requirement account escrow from insurance from fees and point calculation, and since the cap impacts lowpriced loans more than highpriced loans, it would give low and moderate income buyers the same choice for mortgage providers as wealthy buyers have. This is the remaining major issue on which the National Association of realtors continues to push for resolution. We believe a legislative fix is necessary to fully address this discrimination and provide greater access to consumers. Nar strongly supports mortgage lending, a fair and transparent process for consumers. The ability to payroll will go a long way toward ensuring a safer lending environment to consumers. It has been suggested that the theule covers about 90 of mortgages made today. I have seen that number as high as 95 . You know that 90 of loans that 757 stilldit score of limits us quite a bit. But wers will make think lenders will make non queuing loans, so the rule should have little impact on the market lenders will make non qm loans. We hope this is correct. We will continue to monitor the impact of the loans on consumers, including these important new protections, and work with cfpb and others to make sure consumers maintain access to affordable mortgage credit. At this time, i would like to introduce a man, whom we all know, is working hard for the consumer everywhere. Of thest erector consumer Financial Protection Bureau, Richard Cordray the first director. Mr. Cordray, where honored you would join us here today to discuss the ability to repay rule and many issues surrounding qualified mortgages. For those of you who probably already most of you probably already know this, but before joining the bureau, mr. Cordray served on the frontline of Consumer Protection as ohios attorney general. There, he recovered more than 2 billion for ohio retirees, investors, and business owners. He took major steps to strengthen protection against fraudulent foreclosures and financial predators. And franklinurer county treasurer, he led the state and county banking, investment, debt, and financing activities. Early in his career, mr. Cordray served as state representative for the 33rd ohio House District and was the first solicitor general in ohio history. What some of you may not know is argued. Cordray has seven cases before the United States supreme court, both for the clinton and bush justice department. He is a graduate of Michigan State university, oxford university, the university of chicago law school. Speaks,ter mr. Cordray we will do some q a. Then i will be back at that time. Without further ado, ladies and gentlemen, please help me welcome director Richard Cordray. [applause] thank you, chris. Thank you for those remarks, and i will try to address some of those points as we go through. Thank you all for being here today, and i bring you all good tidings and great joy for the new year. If you are like me, change comes hard, and i will still find myself mistakenly writing 2013 on documents such as personal checks for another few weeks, but there will be big differences between last year and this year and the Mortgage Market with the advent of new mortgage rules that congress required our agency to write against a very strict statutory deadline. That was a great deal of work for us, and i know it has meant a great deal of work for many others as well, so i will focus closely on those issues in my remarks today. The consumer Financial Protection Bureau and the National Association of realtors share an important piece of Common Ground and improving Housing Market will help both of us achieve our primary goals. For you, this is your lifeblood. The core of what you do is help people achieve their dreams of homeownership, by matching them up with a home they can love and sustain for as long as they choose to live there. Or us, too, the Central Point is to improve life or consumers, which requires not just sound Legal Protections but also reasonable access to responsible credit. In the Real Estate Market in particular, most people cannot grow into a Brighter Future for themselves and their families without borrowing against their future to fulfill their deepest aspirations. There are very few families can buy a house with ready cash, so drying up access to credit is neither in our interests nor in yours, nor in the countries. However, ande again i believe we share this goal in common, is a world in which mortgage transactions turned out successfully for both borrowers and lenders. We insist terms of the deal be made clear right up front and that they be described accurately. We insist that those involved must care about and document how the deal will be sustainable over the long run. These simple principles will help us ensure that the Mortgage Market never melts down again the way it did just a few short years ago, making peoples lives miserable in the process, including both realtors and consumers. We are putting that sorry chapter behind us and reaching out for better days ahead. Achieving these goals means satisfied customers for every realtor in america and successful consumers who are benefiting by the work done by our new agency. We now asxactly are we ring in the year in 2014 . Five years after the worst financial crisis most of us have ever known, the economy is growing again. People are getting back on their feet. The job market is rebounding, as are the opportunities the jobs can bring. Best of all, we are poised for greater progress in the year ahead. The consumer Financial Protection Bureau is still in our infancy just two and a half years old but we are already putting hundreds of millions of dollars back in the pocket of consumers. We are helping to resolve complaints submitted to us by tens of thousands of consumers. And we are helping americans make smarter financial choices when it comes to managing savings and credit and to dealing with product like mortgages, bank accounts, student loans, auto loans. Each day, we try to put our best foot or word for American Consumers. Most relevant to those of you in this audience is the work we have been doing to improve the functioning of the Mortgage Market, so let me describe the implementation of our new mortgage rules, which chris spoke to to some degree, which are designed to make the Housing Market work at her for all americans, including all of you realtors and your customers. Past look back over the few years, we can start with something Frank Lloyd Wright once said theres nothing more uncommon than common sense. That quotation epitomizes the heady years preceding the financial crisis of 2008. Reason and sound judgment were absent when many banks and other mortgage businesses lent to consumers without even considering whether they could pay back the money. The supposedly rational market. Ad become wildly irrational then it all blew up. You and all your colleagues saw your business drop like a rock. Waves ofwritten the financial booms and busts before, but nothing like we saw five years ago. The collapse of the Housing Market destroyed jobs across every economic sector, and in the communities you serve throughout the country. Out of this mess came demand for financial reform and, among other things, the creation of the new Consumer Bureau. Consumers want and need someone to stand on their side and provide safeguards against bad mortgage deals that ruin their credit, cost them their homes, and saddle them with additional problems. Of course, consumers have to bear responsibility for their own choices, and they had done so in fees and other charges they cannot afford and foreclosure proceedings that up in their lives and in march credit that hangs over them for rs into the future foreclosure proceedings that up and foreclosure proceedings that upend their lives and in marred credit that hangs over them for years into the future. These are bedrock concepts and new commonsense rules that take effect on january 10. These changes will help each of you in the real estate business by creating a more stable and sustainable marketplace. The first back to basics approach addressed by our new mortgage rules is no debt traps. As you know, if a potential client comes to you wanting to buy a home, they need to assess their choices carefully before signing up or a longterm debt. The proposed terms of the mortgage deal should be clear and understandable. If they do their homework and follow plain logic, they should be positioned to make a responsible decision that they can live with potentially for decades. What they should not have to worry about is getting lowered into a loan that will bring them worry. For most people, their mortgage may well be the largest financial obligation of their lifetime, but it can be difficult to figure out how much house and how much mortgage is the right amount. Consumers can be easily confused by the inc. Intricacies of taxes, escrows, Interest Rates, private mortgage insurance, changing Monthly Payments, and various fees. Most people at all levels of income rely on Real Estate Professionals to tell them how it all works, and they assume that the lender will not lend them money unless the lender is confident they will be able to be pay the loan. If the lender does not even check on the important facts like income, savings, and debt load, it is impossible for a lender to know how much the consumer can spend each month on a mortgage. The lender cannot know whether the consumer can truly afford a loan if the lender only looks at whether the consumer can afford Monthly Payments under an introductory teaser rate, which may be irrelevant after the cheaper rate expires. In the lead up to the crisis, we saw this happen over and over again. Some mortgage businesses stopped their inquiries well sort of the kind well short of the kind of Due Diligence needed to lend responsibly. Some joined their customers to engage in wishful thinking. Some trick people into thinking they can afford loans when they could not. Some actually falsified numbers to make them look like they would work. Certainly, some consumers should have known better and made very bad choices, but too many others did not even recognize the risk they had taken on until it was too late. Realtors were on the front lines. We are all now familiar with the exotic mortgages. We know people took out loans they cannot afford and could only keep up with for the first year or two. We know people signed onto complicated terms with no real comprehension of how the transaction actually works. We know Loan Originators got kickbacks for putting emilys and higher cost loans than they actually qualified for putting families in higher cost loans than they actually qualified for. Our lending compensation pool bars premiums, which create a financial incentive to push people into loans with higher Interest Rates than they qualify for under their credit history. And under o