Which federal agency is responsible for regulating mortgage practices?

The correct choice is the Consumer Financial Protection Bureau (CFPB), which is the federal agency specifically tasked with overseeing and regulating mortgage practices among other consumer finance areas. Established in response to the 2008 financial crisis, the CFPB's primary purpose is to ensure that consumers are treated fairly in the financial marketplace and to prevent abusive financial practices. It enforces various laws related to mortgages, including the Truth in Lending Act and the Real Estate Settlement Procedures Act, which are designed to protect borrowers by promoting transparency and accountability in lending.

While other agencies such as the Federal Reserve, the Department of Housing and Urban Development (HUD), and the Office of the Comptroller of the Currency (OCC) play significant roles in the financial system and housing market, their functions differ from the specific regulatory focus of the CFPB. The Federal Reserve primarily influences monetary policy and regulates banks, while HUD is more involved in housing policy and programs rather than direct mortgage regulation. The OCC oversees national banks and federal savings associations but does not specifically regulate all mortgage practices across the board like the CFPB does. Therefore, the CFPB is the agency most closely aligned with regulating mortgage practices to ensure consumer protection.