The Consumer Financial Protection Bureau (CFPB) has published a new report which finds that many consumers are frustrated by the short amount of time they have to review a large stack of complex closing documents when finalizing a mortgage.
"Mortgage closings are often fraught with anxiety," said CFPB Director Richard Cordray. "We have taken action to address some of the problems consumers face, but more needs to be done."
Today's report is the latest component of the CFPB's "Know Before You Owe" mortgage initiative, which is designed to improve the home-buying experience for consumers.
In November 2013, the Bureau issued a rule requiring two new, easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer. The first form is a Loan Estimate, which provides a summary of the key loan terms and estimated loan and closing costs. The second form is a clearer Closing Disclosure, which offers a detailed accounting of the transaction. The Bureau is now in the process of preparing for this rule to be implemented in August 2015.
When the CFPB's new "Know Before You Owe" mortgage rule takes effect, it will address some of the biggest pain points consumers face during the mortgage closing process. For example, consumers will receive their new Closing Disclosure at least three business days in advance of closing to provide more time to review the terms of the deal.