Executive Order on Mortgage Credit Access
Summary
President Trump signed an executive order directing federal financial regulators to consider changes aimed at reducing regulatory burdens in mortgage origination, servicing, and licensing. The order specifically targets community banks and smaller institutions, reflecting a view that current regulations have increased costs and limited credit availability.
What changed
This executive order directs federal financial regulators, including the CFPB, Federal Reserve, FDIC, OCC, NCUA, FHFA, HUD, VA, and USDA, to review and consider reforms to mortgage origination, servicing, capital treatment, appraisals, and licensing requirements. The goal is to reduce regulatory burdens, particularly for community and smaller banks, by potentially modifying Ability-to-Repay and Qualified Mortgage rules, TILA/RESPA/TRID requirements, HMDA reporting thresholds, capital treatment for portfolio mortgages, and appraisal methods. It also calls for a shift in supervision towards underwriting effectiveness and a correction-first approach to compliance errors.
While the order does not change existing law, it signals a potential shift in regulatory approach. Market participants, including mortgage lenders and servicers, should monitor upcoming proposed rules, guidance, and examination changes from these agencies. Compliance planning should anticipate potential modifications to origination, servicing, appraisal, disclosure, and licensing requirements, with a focus on how these changes might impact smaller institutions and borrower access to credit.
What to do next
- Monitor agency actions for proposed rulemakings and guidance related to mortgage origination, servicing, capital, appraisals, and licensing.
- Review internal compliance policies and procedures for potential alignment with anticipated changes, particularly for smaller institutions.
- Assess the impact of potential changes to Ability-to-Repay, QM safe harbors, TRID timing, and HMDA thresholds on current operations.
Source document (simplified)
March 27, 2026
Executive Order Directs Agencies to Revisit Mortgage Rules
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On March 13, President Trump signed an executive order directing federal financial regulators to consider a broad set of changes intended to reduce regulatory burdens affecting mortgage origination, servicing, capital treatment, appraisals, and mortgage-related licensing requirements, particularly for community banks and other smaller banks.
The order does not itself change existing law. Instead, it instructs agencies including the CFPB, Federal Reserve, FDIC, OCC, NCUA, FHFA, HUD, VA, and USDA to consider whether to pursue rulemakings, supervisory changes, and other reforms within their existing authority. The order reflects the Administration’s view that post-Dodd-Frank mortgage regulation has increased compliance costs, reduced bank participation in mortgage lending, and limited credit availability for some borrowers.
Key directives include:
- Origination and disclosure reform. The order directs the CFPB to consider changes to Ability-to-Repay and Qualified Mortgage requirements for smaller banks, including a potentially broader Qualified Mortgage safe harbor for portfolio loans. It also calls for reconsideration of TILA, RESPA, and TRID requirements, including replacing current TRID timing rules with a materiality-based standard and modifying points-and-fees caps for smaller mortgage loans.
- Supervisory and enforcement changes. The order asks federal banking regulators and the CFPB to consider shifting supervision away from technical process compliance and toward underwriting effectiveness and borrower repayment ability. It also calls for a correction-first approach to good-faith compliance errors, with enforcement measures more focused on borrower harm, repeated misconduct, or willful violations.
- HMDA, capital, and liquidity changes. The order directs agencies to consider raising the exemption threshold for HMDA reporting for smaller banks and reducing reporting burdens. It also calls for review of capital treatment for portfolio mortgages, servicing rights, and warehouse lines, along with possible steps to expand housing-finance liquidity through the Federal Home Loan Banks.
- Appraisal, servicing, and digital mortgage modernization. The order calls for expanded use of alternative valuation methods, simplified appraisal requirements for lower-risk loans, broader use of electronic signatures and remote online notarization, and streamlined mortgage servicing expectations for smaller banks. It also directs agencies to evaluate whether mortgage loan officer licensing or registration rules are duplicative for smaller institutions. Putting It Into Practice: This executive order is another example of the broader federal pullback from more prescriptive financial-services regulation (previously discussed here). For mortgage lenders, servicers, and bank partners, the immediate significance is less about the order itself and more about what may follow through proposed rules, guidance, or examination changes. Market participants should watch closely for agency action affecting origination, servicing, appraisal, disclosure, and licensing requirements, and update compliance planning as those developments unfold.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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Sheppard, Mullin, Richter & Hampton LLP
2026
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