Clifford Rossi

The role of the federal government in housing is the first question that needs to be answered, putting aside political rhetoric and preconceived notions about the subject.

If we can rate the reliability, safety and efficiency of automobiles, we can do the same for bank risk management.

The risk profession continues to aid and abet our tendency to want to quantify everything. But understanding real life is ultimately a social, not physical, science.

The FHA's mission to promote housing has contributed to its downfall in addressing its other mission: to maintain fiscal discipline of the mortgage insurance fund.

President Obama's reelection has given his administration a "do-over" opportunity in housing.

Success will depend on how regulators handle four areas: Collaboration, scope, privacy and the regulatory burden.

After absorbing the OTS, the OCC abandoned a comprehensive and sophisticated approach to monitoring interest rate risk.

The Dodd-Frank QM rule will restrict the availability of credit, but it can be less invasive if the CFPB develops a model that weighs all relevant risk factors, not just a few measures of capacity to repay.

Switching out three VaR models in less than a year raises questions about not only the models' stability but also how risks across large, systemically important institutions can be compared.

FHFA is admirably trying to design a platform that will work under any future scenario for the mortgage market. But history shows large-scale projects can fall victim to sheer complexity.

Agencies need to make sure that the regulations being implemented are necessary to address the problems the Dodd-Frank Act intended to address. Analyzing the rules' potential economic impact is critical.

By proposing to design regulations intended to shape state laws and practices, the FHFA is picking a fight with the states that will overshadow any economic benefit from risk-based pricing.

The industry's movement toward plain-vanilla mortgage products since the crisis masks deficiencies in the underwriting process that remain to this day.

Retail credit unions can improve their net worth only through retained earnings. That's made a stressful period for all financial institutions particularly challenging for this category. Let them raise capital.

Technologies like automated underwriting held great promise to manage risk while easing the pain of the mortgage experience for borrowers. But a lack of discipline ushered in an environment where simple rules decide who obtains credit.

The mortgage-writedown program that the FHFA rejected would have produced little benefit to the housing market. But principal forgiveness, done right, can do a lot of good while minimizing potential harm.

This is no time to start unwinding the largest banks. There's enough uncertainty in this fragile economy. But starting a conversation now about the costs and benefits will lay the groundwork for sound action when conditions improve.

Firms may abandon prudent risk management practices such as hedging with derivatives to avoid the SIFI designation. Agencies should have to prepare the equivalent of an Environmental Impact Statement before slapping the SIFI stamp on a firm.

If a senior mortgage executive tells you "there's nothing to worry about, we've got exceptional controls and a great track record in measuring and managing mortgage servicing rights," it is probably worth getting a second opinion.

The Office of Financial Research is not yet fully operational. Critics on the Hill want to gut the agency. Its forthcoming annual report presents a chance to win over lawmakers.