According to the notice, because the CFPB wants “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 next phase of the CFPB’s “Know Before You Owe” initiative will be for the CFPB “to identify ways to improve the mortgage closing process for consumers.”
To kick off the next phase, the CFPB asks 17 questions in the notice that are intended to provide the CFPB with information about “what consumers find most problematic about the current closing process.” The questions are divided into five categories: consumers and closing; errors and changes at closing; other parties at closing; closing documents; and improving closing. Responses must be submitted on or before February 7, 2014.
The CFPB’s questions appear to proceed from the assumption that any closing “problems” stem from the lender’s actions. As a result, the CFPB has not asked about the potential effect a borrower’s actions can have on closing. Particularly in purchase transactions when the seller and borrower negotiate last minute changes to the purchase terms, the closing process is often complicated by corresponding changes to the loan or closing costs sought by the borrower.
As it proceeds with this next phase, we hope the CFPB will be mindful of the burden industry is already facing in implementing the new integrated TILA/RESPA application and closing disclosures by the August 1, 2015 effective date. An attempt by the CFPB to require further changes to the closing process to coincide with that date would present significant challenges for industry.