For months, pundits, stakeholders, policy analysts, journalists and people of all political stripes have been wondering what impact the presidential election would have on the Dodd-Frank Wall Street Reform and Consumer Protection Act and other financial reforms.
Now that we know the new U.S. government looks a lot like the old divided government--with a Democratic president, a Democratic Senate and a Republican House of Representatives--we may have a better idea of what the future looks like for mortgage bankers and the financial services industry.
In the short run, nothing much is likely to change because Congress' first priorities in the lame-duck session are dealing with the "fiscal cliff," sequestration and the federal budget deficit.
Radical changes once the 113th Congress convenes in January are also unlikely. Congress is still divided, and the Obama administration is still a strong proponent of the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB).
The president actively supports implementation of Dodd-Frank's provisions and opposes efforts to interfere with the CFPB's independence or to scale back its regulatory authority. So, bankers should not expect much relief from new regulations.
What might be on the agenda in the new Congress?
President Obama's plan for housing, which includes:
* Expanding access to mortgage refinancing and including homeowners who are underwater;
* Expanding the Home Affordable Refinance Program (HARP) to homeowners with non-government-sponsored enterprise (non-GSE) mortgages;
* Continuing the Home Affordable Modification Program (HAMP);
* Supporting an ongoing, but more limited, government presence in the housing market, particularly for first-time homebuyers and low-income borrowers; and
* Pursuing principal reduction as a foreclosure-prevention tool.
But with a divided Congress, how much of the president's housing agenda will move forward? It's hard to say.
There are still a number of bills from the last congressional session that may be resurrected. Lawmakers on both sides of the aisle may be willing to move ahead with the Responsible Homeowner Refinancing Act of 2012 (Boxer-Menendez) that would eliminate representations and warranties for new servicers, expand eligibility timelines and eliminate upfront refinancing fees and appraisal costs for eligible homeowners.
Other than Boxer-Menendez, there aren't many immediately apparent opportunities. The GOP-controlled House introduced a number of measures to...