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Consumer Financial Protection Bureau

CFPB Seeks Info to Improve Closing Experience

January 7, 2014

The Consumer Financial Protection Bureau (CFPB) on Thursday issued a notice and request for information on ways to improve the closing process.

The CFPB wants to hear from professionals such as settlement and closing agents, and attorneys, who work with consumers during the closing process. The CFPB indicated the anecdotes and information that is provided will be used to research and test solutions that address some of the biggest pain points associated with closing on a mortgage.

“The CFPB seeks to encourage the development of a more streamlined, efficient, and educational closing process as the mortgage industry increases its usage of technology, electronic signatures, and paperless processes,” the Bureau reported in its notice and request for information.

The CFPB is seeking answers to 17 questions broken into five categories.

Consumers and Closing

  1. What are common problems or issues consumers face at closing? What parts of the closing process do consumers find confusing or overwhelming?
  2. Are there specific parts of the closing process that borrowers find particularly helpful?
  3. What do consumers remember about closing as related to the overall mortgage/home-buying process? What do consumers remember about closing?
  4. How long does the closing process usually take? Do borrowers feel that the time at the closing table was an appropriate amount of time? Is it too long? Too short? Just right?
  5. How 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?
  6. What, if anything, have you found helps consumers understand the terms of the loan?
Errors and Changes at Closing
  1. What are some common errors you have seen at closing? How are these errors detected, if at all? Tell us about errors that were detected after closing.
  2. What changes, diverging from what was originally presented at closing, often surprise consumers at closing? How do consumers react to changes at closing?
Other Parties at Closing
  1. How, if at all, do consumers typically seek advice during closing? In person? By phone? Online?
  2. Where and to whom do consumers turn for advice during closing? Whom do they typically trust?
Closing Documents
  1. What documents do borrowers usually remember seeing? What documents they remember signing?
  2. What documents do consumers find particularly confusing?
  3. What resources do borrowers use to define unfamiliar terms of the loan?
Improving Closing
  1. What, if anything, would you change about the closing process to make it a better experience for consumers?
  2. What questions should consumers ask at closing? What are the most important pieces of information/documents for them to review?
  3. What is the single most important question a consumer should ask at closing?
  4. What is the single most important thing a consumer should do before coming to the closing table?
Deadline to comment is Feb. 7. ALTA plans to file comments based off guidance from its RESPA Task Force and Government Affairs Committee. The Title Action Network will ask members to comment as well.

According to Michelle Korsmo, ALTA’s chief executive officer, this project is important to CFPB Director Richard Cordray.

“In my meetings with the director, we talked extensively about his desire to simplify and improve real estate closings for consumers,” she said.

Frank Pellegrini, ALTA’s immediate past president, had a conversation with Cordray last April about issues that frustrate consumers during the closing process and how closing officers and settlement agents work to make the experience better.

“This is a great opportunity for the settlement agent community to share its expertise and knowledge with policymakers,” Korsmo said. “While ALTA is preparing a response, we urge title professionals to provide their own comments.”

Comments can be made at Regulations.gov.

Responses also can be delivered to the CFPB at: Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552.

If you have questions, contact Steve Gottheim, ALTA’s legislative and regulatory counsel, at sgottheim@alta.org or 202-261-2943.



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