I know it is difficult to understand why the mortgage process gets more complicated. And I know its curious why the number of loan disclosures you have to sign just keeps growing. When I started in the mortgage business in 1986 I bet there were only 12-15 pages of loan disclosures. That ballooned to around 30-35 pages up until 2008. Then the financial world seemed to implode in 2008, and the Feds took over Fannie Mae and Freddie Mac, and the number of disclosures you get now must be over 50. And now we have the Consumer Financial Protection Bureau’s latest action. Get ready for more disclosures, and more cost, and more complication.
The Consumer Financial Protection Bureau (CFPB) has written up a doozy about some disclosures that fall under the RESPA/Truth in Lending Act (TILA). The 1100 page proposed rule (yes, I said 1100) will take some time to digest I imagine. And I am guessing it will create more disclosures of stuff we need to tell the consumer, and it will create more layers of compliance, which creates more cost, which gets passed onto the consumer.
It has been 14 months since the CFPB released its first round of proposed integrated mortgage forms, and recently, the agency released its 1100 page proposed rule that combines the final proposal for those disclosures and the new requirements as detailed in the Dodd-Frank Act, along with extensive guidance regarding compliance with those requirements. In releasing the proposed rule, the CFPB noted that it has engaged in extensive consumer and industry research and public outreach for more than a year in crafting the new regulations and the new forms. Wow. I am stupefied. Does anyone really think any of this will help protect the consumer? Does the consumer really need any more protecting in the mortgage industry?
There are numerous regulators to complain to about improper mortgage practices. You can take your business elsewhere. You can choose to initiate a lawsuit against a lender. You can complain via Yelp, Angie’s List and numerous other websites that rank service providers. Did we really, truly, honestly need another 1100 pages of oversight? Really?