It has been my belief from day one that any real economic recovery must have housing at its core.
In that vein, any attempt to regulate the mortgage industry—even a flawed one—is better than no attempt at all. Even an incorrect approach can be fixed, and has a chance to ultimately succeed.
For instance, the Qualified Mortgage rule recently unveiled by the Consumer Financial Protection Bureau lacks a thorough enforcement arm, but it wasn't entirely without merit. It was thorough, and had the potential to benefit homeowners.
That's probably why the banks—and the politicians that stand with them—are doing everything in their power to kill the more restrictive lending rules, not by arguing the merits of the rule itself, but by trying to undermine the legitimacy of the CFPB itself.
A decision by a federal appeals court has called into question President Barack Obama's recess appointment of the CFPB's director Richard Cordray last year, and everything Cordray has done in the last 12 months—including establishing the Qualified Mortgage Rule—could be headed to the scrap yard.
Instead of fine tuning the CFPB's new lending rules, and giving them the financial backing they need to succeed, the president and Congress are rearguing Cordray's credentials, and whether his appointment is constitutional. Meanwhile homes are still being foreclosed on, bad mortgages are still being sold, and the nation is stuck with a rudderless CFPB.
In other words, the banks got their wish and it's open season on homeowners again.
Whether or not the president overstepped his bounds with recess appointments pales in comparison to how the banks overstepped their bounds by selling fraudulent mortgages and wrecking the economy. Congress should look at the big picture and do everything possible to ensure the stability of the CFPB so that we can work to rebuild the economy instead of being hung up on the definition of the word "recess."
The alternative is sending the entire economy back into a "recess-ion."
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Real estate attorney Roy Oppenheim left Wall Street for Main Street, founding Oppenheim Law with his wife in 1989 in Fort Lauderdale, Fla. He is vice president of Weston Title and creator of the South Florida Law Blog, named the best business and technology blog by the South Florida Sun-Sentinel. Follow Roy on Twitter at@OpLaw or like Oppenheim Law on Facebook.