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David Stevens, former Federal Housing Administration commissioner and currently chief executive of the Mortgage Bankers Association, said in a Washington Post interview that "credit overlays," or the self-imposed policies lenders are using, are why many borrowers aren't receiving loans in today's housing market.

David Stevens

He said lenders adopt such policies to protect themselves from both regulatory and legal risk. "Lenders are putting policies in place for self-protection," he said. "Lenders are saying we're going to have clear lines so our decisions can never be questioned when a loan defaults. Lenders feel like there really have to be zero errors now."

When asked by the Post what he has advised the White House regarding the current housing market, Stevens replied, "I told them that regulators need to hold lenders accountable for egregious behavior. But they also have to create better clarity for lenders on what they will be held accountable for down the road," he said. He also noted there are about a dozen regulators involved in housing finance and that this administration "needs to look at the overall collective impact of an overly aggressive regulatory and legal framework."

He said the regulations and rulemaking "pile on so deeply that nobody wants to take any risk."

NAFCU has met with the White House as well as other housing finance regulators to discuss how the regulatory burden affects credit unions. According to the May edition of NAFCU's Economic and CU Monitor, about 86 percent of survey respondents noted that they are either reducing or ceasing to offer mortgage that don't fit the definition of "qualified mortgage" set by CFPB rules.

"Credit unions are erring on the side of caution in these first few months following the implementation of the CFPB's mortgage rules, but they are still working to lend to their members and providing loans to their members that they can repay," said NAFCU Regulatory Affairs Counsel Angela Meyster.