Tech News World quoted me in CFPB Shifts Some Power to Mortgage Shoppers. The story reads in part,
The Consumer Financial Protection Bureau on Tuesday introduced Owning a Home, a set of online tools designed to make it easier for consumers to comparison shop for the best deal in mortgage financing.
With one tool, users can plug in a credit score and ZIP code to get a sense of the current interest rates being offered within a particular area.
There is also a guide that walks consumers through the various loan options on the market, complete with basic definitions of “loan term,” “interest rate type” and “loan type.”
Another guide describes the closing documents in a typical home purchase.
There is also a checklist that offers suggestions for a smooth closing, including advice on mistakes to avoid.
Other tools will be added to facilitate shopping for a mortgage and improving consumer understanding of the mortgage process.
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This offering is not going to automatically assist all potential homebuyers as they approach the mortgage process, though, said Brooklyn Law School professor David Reiss.
“Shopping for a mortgage is one of the most complex financial transactions that people engage in,” he told CRM Buyer. “Providing additional information should help at least some people, but others are overwhelmed by this type of transaction and will continue to rely on word of mouth, advertising and preexisting relationships to find a lender.”
Shady Lenders
Some lenders benefit from dealing with uneducated consumers and are able to charge higher fees and interest rates as a result, Reiss pointed out.
The informed consumer is in a much better position to select products and services that provide the greatest value, Cadden observed.
“Informed consumers are, to put it simply, much better shoppers,” he said. “The challenge has always been how to easily acquire information.”
CFPB’s Mandate
The mortgage shopping assistance is a natural extension of the CFPB’s broader mandate to act as an advocate for consumers in financial matters, Reiss noted.
“It clearly complements the other components of that mission,” he said.
