There were few surprises in the Report Issued by the CFPB  from those who elected to respond to the “Request for Information” about closings.  It’s too complicated, and becoming more complicated by the day.

The 69 page report reviewed information it received from its recent  public Survey-about the challenges consumers face when closing on a home. The Bureau identified several “pain points” consumers regularly experience during the closing process. Consumers reported being frustrated by (among other things)

  • The short amount of time to review a large number of closing documents
  •  Not understanding the documents and the legalese terms;
  • The lack of resources providing explanations about closing documents, which are full of technical jargon; and
  • Errors in the quantity of paperwork resulting in long delays.

Our legislators, while hoping to make things clearer for the consumer, continue to make the process more complicated. In my opinion, the average consumer does NOT want to know the maximum amount they could pay for a loan, including principle and interest, points and expenses if they keep the loan for thirty years as disclosed on a TIL.  How many people keep the same house for thirty years with the same mortgage? But that is a requirement under the TIL law.

In CFPB’s defense, it oversees just a small piece of the process and has been mandated to combine the HUD-1 and TIL – a difficult undertaking. And it has  made excellent strides in asking the stakeholders for advice.  Lenders, states, counties, title companies, attorneys and others all impact the process and have input that the CFPB is considering and taking seriously.  I hope that the results will be as good as the process involved.

Just a thought for e-closings – Why not make the detailed  information available to those who wish to review such information without requiring that all the information be covered.  It’s overwhelming to read 100 pages and if the consumer knows that a FNMA mortgage is a standard form for the state and CANNOT be modified, there should be some comfort in that.

But right now, it’s too much noise- like the mail I get from the bank almost daily.  Every mailing includes multiple pages of disclaimers from the bank. There is so much “noise” in all the mail, that we miss the point. Who reads all that jargon.  I think the average consumer wants to know the monthly outgo – i.e. what is the total monthly PITI?  After that, the mortgage Note and mortgage deed, and title deed need to be explained. But to spend an hour going over a hundred pages of disclosures is just too much – both for the closer and the consumer. I love the idea of the consumer being able to read the documents online and choose the level of understanding, with an explanation to clarify the point of each document BEFORE the table closing.

E-closing would make all our jobs easier and the consumer much more comfortable with the process.  What do you think?