The Consumer Financial Protection Bureau (CFPB) has announced that it is considering new rules designed to ‘simplify mortgage points and fees and bring greater transparency to the mortgage loan origination market.’
‘Mortgages today often come with so many different types of fees and points that it can be hard to compare offers,’ says CFPB Director Richard Cordray. ‘We want to bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them.’
The CFPB is considering the following proposals:
- Requiring an interest-rate reduction when consumers elect to pay discount points;
- Requiring lenders to offer consumers a no-discount-point loan option; and
- Banning origination charges that vary with the size of the loan.
The CFPB is also raising the possibility of new rules to address mortgage loan originators' qualifications and compensation. These would include what the bureau dubs ‘character and fitness requirements’ along with criminal background checks and new training requirements.
Furthermore, the CFPB is also considering proposals to clarify the loan steering prohibitions defined in the Dodd-Frank Act. The bureau states that this would help ‘clarify certain issues in the existing rule that have created industry confusion.’
The CFPB plans to publish a notice of proposed rulemaking this summer, which will be followed by a formal public comment period. The rules will be finalized by Jan. 21, 2013.