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CFPB Wants Your Thoughts on Mortgage Closing Process

by devteam January 3rd, 2014 | Share

As the next step in its “Know Before You Owe”rninitiative the Consumer Financial Protection Bureau (CFPB) plans to look atrnwhat goes on at the home purchase closing table.  CFPB says the closing process is one that canrnbe stressful and confusing for consumers and is often their last opportunity torngain information and understanding of a major long-term financialrncommitment.  CPFB wants to obtain morerninformation of what in the process consumers find to be most problematic.  </p

In a notice to be published today in The FederalrnRegister the Bureau is inviting public comments on consumer “pain points” atrnclosing.  This is the first step in severalrninitiatives to test and study ways in which the closing process might be improvedrnthrough market innovations and technology.</p

CFPB is seeking general information as well as answersrnto 17 specific questions about closings and consumer preparation for the event,rnthe types of errors and changes that occur, the role of other parties in thernprocess, paperwork, and consumers’ comfort with the process.  CFPB is hoping for responses from a broadrnaway of participants including consumers, mortgage lenders and servicers, realrnestate professionals, housing counselors, real estate attorneys, settlementrnagents, consumer and community advocates, and any other interested parties.</p

Respondents are encouraged in their comments tornaddress the general subject areas as well as the specific questions therein: </p

Consumers and Closing</p<ul class="unIndentedList"<liWhatrnare common problems or issues consumers face at closing? What parts of the closingrnprocess do consumers find confusing or overwhelming?</li<liArernthere specific parts of the closing process that borrowers find particularly helpful?</li<liWhatrndo consumers remember about closing as related to the overall mortgage/home- buyingrnprocess? </li<liHowrnlong does the closing process usually take and do borrowers feel this time isrnof appropriate length? </li<liHowrnempowered do consumers seem to feel at closing? Did they come to closing with questions?rnDid they review the forms beforehand? Did they know that they can request theirrndocuments in advance? Did they negotiate?</li<liWhat,rnif anything, have you found helps consumers understand the terms of the loan?</li</ul

Errors and Changes at Closing</p<ul class="unIndentedList"<liWhatrnare some common errors you have seen at closing? After closing? How are these errors detected, if at all? </li<liWhatrnchanges often surprise consumers at closing? How do consumers react to changes atrnclosing?</li</ul

Other Parties at Closing</p<ul class="unIndentedList"<liHow,rnif at all, do consumers typically seek advice during closing? In person? By phone?rnOnline?</li<liWherernand to whom do consumers turn for advice during closing? Whom do they typicallyrntrust?</li</ul

Closing Documents</p<ul class="unIndentedList"<liWhatrndocuments do borrowers usually remember seeing? Signing?</li<liWhatrndocuments do consumers find particularly confusing?</li<liWhatrnresources do borrowers use to define unfamiliar terms of the loan?</li</ul

Improving Closing</p<ul class="unIndentedList"<liWhat,rnif anything, would you change about the closing process to make it a better experiencernfor consumers?</li<liWhatrnquestions should consumers ask at closing? What are the most important pieces ofrninformation/documents for them to review?</li<liWhatrnis the single most important thing a consumer should do before coming to the closingrntable?</li</ul

The Bureau said it hopes the responses, which mustrnbe submitted on or before February 7, will lead into a project to increase consumerrnknowledge, understanding, and confidence at closing as the mortgage industry increasesrnits usage of technology, electronic signatures, and paperless processes. </p

More info on submitting a response can be found at the Federal Register.</p<p

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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