While much of the attention around the White House’s housing actions has focused on removing barriers to building new homes, a second executive order signed Friday could have major implications for how mortgages are originated, underwritten, and serviced.
The order, titled “Promoting Access to Mortgage Credit,” directs federal regulators to review a wide range of mortgage rules that the administration says have increased compliance costs, reduced competition, and pushed many community banks out of the mortgage market.
The administration says the goal is to expand mortgage credit availability, lower lending costs, and restore competition among lenders by revisiting regulatory frameworks adopted after the 2008 financial crisis.
For loan originators, the directive signals that some of the most complex parts of the mortgage regulatory framework — including disclosure, underwriting, servicing, and appraisal rules — could soon be up for revision.
The Mortgage Rules That Could Change
The order instructs regulators such as the Consumer Financial Protection Bureau, Federal Housing Finance Agency, and federal banking regulators to review mortgage rules affecting lending, servicing, disclosures, and capital requirements.
The review could potentially include several key mortgage regulations that have shaped the industry since Dodd-Frank.
Among the rules regulators could revisit:
- Ability-to-Repay / Qualified Mortgage (ATR-QM) standards governing underwriting requirements.
- TRID disclosure requirements under the Truth in Lending Act and Real Estate Settlement Procedures Act.
- Home Mortgage Disclosure Act (HMDA) reporting requirements.
- Mortgage servicing regulations created after the foreclosure crisis.
- Capital and liquidity standards affecting banks that hold mortgage assets.
- Supervisory guidance for community banks participating in mortgage lending.
According to the White House, the review aims to ensure that lenders are evaluated on “prudent underwriting” rather than technical compliance processes that add costs but do little to improve loan quality.
Appraisal Rules Also In The Crosshairs
Another major piece of the order focuses on modernizing the appraisal process.
Federal regulators are directed to consider changes such as:
• Expanding the use of alternative valuation models (AVMs)
• Reducing appraisal requirements for low-risk transactions
• Establishing clearer timelines for completing appraisals
The administration also wants regulators to promote digital mortgage technologies, including expanded use of e-notes, electronic signatures, and remote online notarization.
Changes that could speed up closings and reduce loan origination costs.
Why Community Banks Are Central To The Order
The executive order repeatedly emphasizes the role of community banks and smaller lenders, which the administration says have been squeezed out of the mortgage market by compliance costs.
The order specifically calls for tailoring mortgage rules for banks with less than $100 billion in assets to encourage them to return to lending.
Industry groups have long argued that regulatory complexity has made it difficult for smaller lenders to compete with large institutions that have dedicated compliance departments.
Community banks and credit unions have scaled back mortgage lending in recent years, a trend policymakers say has reduced competition and access to credit in some markets.
Part Of A Broader Housing Strategy
The mortgage credit order was issued alongside a second executive order aimed at reducing regulatory barriers to housing construction.
Together, the two measures attempt to address housing affordability from both sides of the equation — housing supply and mortgage financing.
Housing costs have surged nationwide in recent years, and policymakers say improving access to mortgage credit is essential for helping qualified buyers enter the market.
Bottom Line For Originators
For mortgage professionals, the executive order does not change any rules immediately — but it signals that a major regulatory review of mortgage lending is underway.
If regulators ultimately revise the rules under review, the changes could potentially:
• Reduce compliance burdens tied to disclosures and reporting
• Expand flexibility for underwriting outside strict agency guidelines
• Speed up loan closings through appraisal modernization
• Encourage community banks to re-enter the mortgage market
• Increase competition among lenders
In short, while the administration’s first housing order focuses on building more homes, the second could eventually reshape how mortgages are made.
For LO's, that could mean more lending flexibility, faster transactions, and potentially more competition in the market.
