CFPB Releases RFI on Mortgage Closing Costs; MBA Shares Concerns Regarding Credit Reporting Price Increases

The American Bankers Association, Housing Policy Council and Mortgage Bankers Association issued the following statement in response to the Consumer Financial Protection Bureau’s Request for Information on mortgage closing costs:

“Given the significant home-price appreciation and swift inflation that consumers have encountered in recent years, a discussion about policies that address affordability burdens while maintaining healthy and competitive mortgage markets makes good sense.

Mortgage lenders fully and transparently disclose costs to every borrower on forms developed and prescribed by Congress in the Dodd-Frank Act and implemented by the CFPB. Many of those disclosed costs, such as title, appraisal and credit reports are required by federal statutes, safety and soundness guidelines, and the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), and Fannie Mae and Freddie Mac as a condition of buying and insuring a mortgage. Moreover, the services these fees cover mitigate risk for taxpayers and borrowers alike. 

The CFPB recently concluded a formal review and evaluation of its mortgage disclosure rules and praised them for improving borrower understanding and facilitating the ability to shop among lenders. The industry invested considerable resources to implement these new rules just a decade ago. If the CFPB is now modifying its previous position and is considering changing this complex regulatory disclosure regime, a rule-making process governed by the Administrative Procedure Act–and supported by a robust cost-benefit analysis–is the only appropriate vehicle to initiate that work. Such a rule-making process would allow for the proper level of engagement to produce changes that benefit consumers and do not add compliance costs and lead to negative unintended consequences.”

A Mortgage Bankers Association spokesperson noted MBA welcomes the opportunity to respond to the CFPB’s RFI, “and MBA will provide an in-depth overview on mortgage closing costs, highlighting their tangible benefits to borrowers and how they protect taxpayers. We have been vocal since last year about the sharply rising costs of credit reports and other credit reporting products and are pleased the RFI provides an opportunity to share our concerns about the lack of transparency into what’s driving these pricing changes.”