President Trump has signed a new executive order aimed at “restoring mortgage competition” and expanding access to loans — a move that prompted some praise from housing industry organizations.
The order, signed Friday, blames “regulatory burdens” for driving up mortgage costs, limiting “access for creditworthy borrowers” and weakening “community bank participation in lending.” Other problems in the lending space, according to the order, include reduced competition among lenders, outdated appraisal rules and lower amounts of available capital, among other things.
In response, the order aims to cut “red tape.” That specifically involves directing the Consumer Financial Protection Bureau (CFPB) to “appropriately tailor mortgage rules to help enable smaller banks to facilitate more affordable lending.” Other components of the order include:
- Calling for federal regulators to revise their guidance and “focus on prudent underwriting, rather than overly technical process-oriented approaches to lending”
- Directing the CFPB to modernize reporting requirements
- Modernizing appraisal regulations
- Promoting “digital mortgage modernization by expanding electronic signatures, e-notes, and remote online notarization.”
The order comes as Trump increasingly makes housing a central part of his administrative agenda. Among other things, he has repeatedly called for lower mortgage rates (an issue raised in Friday’s order as well) and attacked institutional real estate investors. In response to Trump’s criticism of institutional investors, the U.S. Senate recently added a provision to its latest housing bill that would ban such entities from from buying up certain single-family homes.
Additionally, Trump signed a second order last week that aims to clear regulatory barriers in the home construction industry.
Trump’s order on mortgage access drew some praise from housing organizations. In a statement, David M. Dworkin — president and CEO of the National Housing Conference — said his organization “supports efforts to reduce unnecessary regulatory barriers that slow housing production, limit access to mortgage credit, and increase costs for American families.”
Dworkin added that Trump’s orders “highlight the importance of addressing both the supply and financing challenges that contribute to the nation’s housing affordability crisis.”
The National Association of Realtors was also cautiously optimistic, saying in a statement that Trump’s order “highlights the importance of reviewing regulatory barriers that can increase costs for borrowers and limit the ability of lenders to serve their local markets.”
“NAR looks forward to reviewing the proposals and to working with the Administration, Congress, and regulators to ensure that efforts to expand access to credit prove beneficial to consumers,” the statement adds, “and are paired with policies that address the nation’s housing supply challenges. Together, such efforts will help more Americans achieve the dream of homeownership.”
