The Consumer Finance Protection Bureau (CFPB) will soon implement new rules to better inform borrowers about their mortgage loans and give them more accurate estimates of closing costs.In testimony before Congress on May 14, I argued that while these changes are ultimately an important step forward for consumers, we must proceed with caution and give lenders more time to adjust to the new rules. The new rules, however, are a small technical issue dwarfed by a more fundamental problem in today’s housing finance system: the unfinished business of reforming Fannie Mae and Freddie Mac that has left us with a fragile and unsustainable system.The existing mortgage settlement process is ripe for improvementFor years, the real estate settlement process has been cumbersome and unnecessarily complex. At closing, the borrower receives two sets of disclosure documents (as required under the Truth in Lending and Real Estate Settlement Procedures Acts), generally understands neither, and faces closing costs that are much higher than expected.
Give Lenders More Time to Implement New Borrower Disclosure Rules
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