Big Brother is Watching – Joint Venture between FHFA and CFPB to Monitor the Mortgage Market
Joint Venture between FHFA and CFPB to Monitor the Mortgage Market!
A new national mortgage database is being created to provide the ability to track and monitor various topics. Some of the ways this database would be used would be to:
- Monitor the relative health of the mortgage markets and consumers by tracking mortgage loan performance, such as payments being made on time and information on loan modifications, foreclosures and bankruptcies
- Provide new insight on consumer decision-making by using the database to conduct surveys
- Monitor new and emerging products in the mortgage market that would assist regulators in understanding potential problems or new risks via volume and performance data
- View both first- and second-lien mortgages for a given borrower which would allow policymakers the ability to see how many mortgages borrowers may have and how they are performing
- Understand the impact of consumers’ debt burdens with the ability to view or have information on a borrower’s other debt obligations, including auto loans or student debt.
This database will include information from the birth of a mortgage loan through the servicing and will include a variety of borrower characteristics. The database will include loan-level data about the mortgage such as the borrower’s financial profile, their credit profile, the mortgage product and associated terms and ongoing payment history.
The data would be updated on a monthly basis and would be able to track as far back as 1998.
What does it really mean to you?
Does this mean Big Brother is upon us? Yes it does. This is being presented as a solution that the FHFA was required to implement under the Housing and Recovery Act of 2008, which was to conduct a monthly mortgage market survey.
They go on to say that the database will not contain any personally identifiable information, but I find that hard to believe.
Can this be a good thing? It depends on the real purpose of this national database and how it will be used. It seems innocent enough on the surface, but if used inappropriately it could further restrict the independence and decision-making that is currently left to a borrower or lender based on their own personal risk appetite.
Much of this information is currently available from many private entities that collect various bits of our lives, but it is not all inclusive with any one entity and there is no one central place that holds all this information in one place, UNTIL NOW! The government will now have access to this information.
It will take a while to build this database, but the CFPB and FHFA are indicating that early versions of the database could be ready as early as sometime in 2013.
Karen Deis, Publisher of www.MortgageCurrentcy.com, an ezine that keeps you up to date on all the mortgage rule updates because getting a loan approved and closed these days IS rocket science!