Unfortunately, the Consumer Financial Protection Bureau (CFPB) has hurt consumers that want to obtain mortgages. This has dampened the real estate market to a degree. At a recent real estate conference I attended, I was on a panel with several colleagues, one of which is a lender. He made it clear to the Realtors in the room that most, if not all, lenders today are not focusing on serving real estate agents or their clients, but are only focusing on compliance with the CFPB. This is a real blow to the customer service people expect in a real estate transaction. Here are some of the facts:
- Since the inception of the CFPB, lenders’ costs have increased by 25% due to compliance requirements
- In the first quarter of 2014, non-institutional lenders (mortgage brokers and bankers) lost $194 on every loan they made.
Obviously, this means that the consumer will be paying higher costs for mortgages. I don’t believe this was the intent of the CFPB or the Dodd/Frank bill that created the Bureau, but it seems like Congress always acts before understanding the unintended consequences…
Also, if you are interested, I received this information from Ken Trepeta, Director – Real Estate Services at NAR. I have included the link for you to sign up for the webinar on changes in the RESPA and the TILA. It sounds like an interesting and informative discussion.
On Tuesday August 26, 2014 at 2:00 PM EDT the Consumer Financial Protection Bureau (CFPB) and Federal Reserve will be hosting a webinar on the implementation of changes to the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA). In addition to major changes to the loan disclosure and closing forms themselves, the new rules will require that the settlement statement be completed three days prior to closing. The new forms and rules go into effect less than one year from now and industry is working diligently to put together systems and train staff to deal with the new forms and rules as well as integrating the new rules with local customs and practices. This webinar is part of the process of answering questions and concerns relating to implementation. All those with an interest in disclosures, the closing process, and RESPA/TILA should sign up and listen in. Signup page: https://www.webcaster4.com/Webcast/Page/48/5305
As you can imagine, these new rules that go into effect in less than a year will probably add more costs to the closings on real estate transactions…I truly believe that the CFPB is hurting the consumer more than helping, when it comes to real estate. What are your thoughts?