As the next step in its “Know Before You Owe”
initiative the Consumer Financial Protection Bureau (CFPB) plans to look at
what goes on at the home purchase closing table. CFPB says the closing process is one that can
be stressful and confusing for consumers and is often their last opportunity to
gain information and understanding of a major long-term financial
commitment. CPFB wants to obtain more
information of what in the process consumers find to be most problematic.
In a notice to be published today in The Federal
Register the Bureau is inviting public comments on consumer “pain points” at
closing. This is the first step in several
initiatives to test and study ways in which the closing process might be improved
through market innovations and technology.
CFPB is seeking general information as well as answers
to 17 specific questions about closings and consumer preparation for the event,
the types of errors and changes that occur, the role of other parties in the
process, paperwork, and consumers’ comfort with the process. CFPB is hoping for responses from a broad
away of participants including consumers, mortgage lenders and servicers, real
estate professionals, housing counselors, real estate attorneys, settlement
agents, consumer and community advocates, and any other interested parties.
Respondents are encouraged in their comments to
address the general subject areas as well as the specific questions therein:
Consumers and Closing
are common problems or issues consumers face at closing? What parts of the closing
process do consumers find confusing or overwhelming?
there specific parts of the closing process that borrowers find particularly helpful?
do consumers remember about closing as related to the overall mortgage/home- buying
long does the closing process usually take and do borrowers feel this time is
of appropriate length?
empowered do consumers seem to feel at closing? Did they come to closing with questions?
Did they review the forms beforehand? Did they know that they can request their
documents in advance? Did they negotiate?
if anything, have you found helps consumers understand the terms of the loan?
Errors and Changes at Closing
are some common errors you have seen at closing? After closing? How are these errors detected, if at all?
changes often surprise consumers at closing? How do consumers react to changes at
Other Parties at Closing
if at all, do consumers typically seek advice during closing? In person? By phone?
and to whom do consumers turn for advice during closing? Whom do they typically
documents do borrowers usually remember seeing? Signing?
documents do consumers find particularly confusing?
resources do borrowers use to define unfamiliar terms of the loan?
if anything, would you change about the closing process to make it a better experience
questions should consumers ask at closing? What are the most important pieces of
information/documents for them to review?
is the single most important thing a consumer should do before coming to the closing
The Bureau said it hopes the responses, which must
be submitted on or before February 7, will lead into a project to increase consumer
knowledge, understanding, and confidence at closing as the mortgage industry increases
its usage of technology, electronic signatures, and paperless processes.
More info on submitting a response can be found at the Federal Register.