The Consumer Financial Protection Bureau (CFPB) yesterday published a report which finds that many consumers are frustrated by the short amount of time they have to review a large stack of complex closing documents when finalizing a mortgage. The CFPB also released guidelines for an upcoming eClosing pilot project to assess how electronic closings can benefit consumers as they navigate the mortgage closing process.
The report and guidelines are the latest components of the CFPB’s “Know Before You Owe” mortgage initiative, which is designed to improve the home-buying experience for consumers. In November 2013, the CFPB issued a rule requiring two, new easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer. The first form is a Loan Estimate, which provides a summary of the key loan terms and estimated loan and closing costs. The second form is a clearer Closing Disclosure, which offers a detailed accounting of the transaction.
The CFPB is now in the process of preparing for this rule to be implemented in August 2015. Yesterday’s report and the upcoming pilot program are not part of a rulemaking process, but rather are designed to promote best practices in the marketplace.
The report on mortgage closings and the eClosing pilot guidelines are available on the CFPB website.