Most Americans, even those who are savvy home buyers, dread the thought of a mortgage. For that very reason, the Consumer Financial Protection Bureau (CFPB) is considering rules that it thinks would simplify mortgage points and fees and bring greater transparency to the mortgage loan origination market.
The rules, expected to be announced this summer and finalized by January 2013, would make it easy for consumers to compare mortgages and to understand the costs involved with those mortgages.
The CFPB is considering proposals that would require an interest rate reduction when consumers elect to pay discount points, require lenders to offer consumers a no discount point loan option, and ban origination charges that vary with the size of the loan.
In addition, the CFPB is proposing regulations that would set qualification and screening standards for all loan originators, who currently meet many different sets of standards established by the Secure and Fair Enforcement Act. The proposed rules would also prohibit loan originators from directing consumers into high costs loans simply because the originator could make more money.