Consumer Comeback Blog

Consumer Agency Proposes More Accountability, Loan Options in Mortgage Market

In an effort to make mortgage costs and loans easier for consumers to understand, the Consumer Financial Protection Bureau is proposing new rules that would place restrictions on mortgage lenders and provide more options to potential borrowers.

Consumers are urged to weigh in on the proposals online prior to Oct. 16, and the bureau will make its final decisions regarding the new rules in January.

One proposed rule would require lenders to offer loans with no discount points and no origination fees in order to help consumers better compare competing offers from multiple lenders or similar offers from the same lender.

Another would require a reduction in loan interest rates when borrowers choose to pay upfront points or fees, ensuring that points and fees function to reduce the interest rate and consumers’ monthly loan payments.

The CFPB is also proposing that all lenders have to meet the same qualifications in order to provide mortgage loans, so that consumers are exposed to more lenders and to ensure that every mortgage loan a consumer could get is coming from an unquestionably qualified lender.

Finally, the CFPB is proposing that loan originators can not be compensated based on the high interest rates of loans it provides, an can receive no incentives for issuing loans that adversely affect consumers.