Consumer Financial Protection Bureau The New Kid On The Block

Consumer Financial Protection Bureau The New Kid On The Block

The real estate 'bust' of 2008 as we know had a huge impact  on the housing/real estate market  and in its wake the Dodd-Frank Act was passed

Which brought in the 'new kid on the block' - the CFPB - the Consumer Financial Protection Bureau -

As one financial adviser put it - "If you think the IRS can come after you then know these come after you with even bigger teeth and longer claws" - they are self funding and have broad authority and jurisdiction. As at August 6, 2015  the CFPB has given $10 BILLION in relief to consumers as a result of their enforcement actions against companies providing mortgages, credit cards, credit bureaus, mortgage servicing, pay day loans and other such loans for none compliance or illegal/shady practices against the consumer.

So what are the major CFPB Initiatives and how does that impact buying and selling real estate?

  • Greater consumer protection

  • Rewriting mortgage finance rules

  • Consolidate disclosures

  • Enforcing existing regulations and corrective actions

  • Lenders accountable if their 'vendors' break the law

So if your are buying a home and need a mortgage what will you expect from your lender/mortgage provider from October 2015?

  1. Regular consumer statements

  2. Advance notice of higher interest rates on ARMs (Adjustable Rate Mortgage)

  3. The are prohibited from charging 'forced-placed insurance' unless reasonable evidence that homeowners lack insurance on a property

  4. If the mortgagee misses 2 payments the service provider MUST be proactive and discussi options and provide written notice

  5. Provide accessible call center and contact information

  6. One application for options, provide status and cannot foreclose if consumer is pursuing options

  7. Must consider short sale or other options before foreclosure is pursuing options

CFPB Goals for the consumer are

  • Improved understanding

  • Better comparison shopping

  • Avoiding costly surprises at the closing table

This is being done by the introduction of 2 new simpler forms

LOAN ESTIMATE - this replaces Good Faith Estimate and the 'early' Truth in Lending Disclosure and MUST BE SENT  to the consumer within 3 business days of the loan application and no later than the 7th business before closing.

CLOSING DISCLOSURE - This will  integrate and replace the Truth in Lending, Good Faith Estimate and HUD-1 Closing Statement and MUST BE RECEIVED by the consumer 3 business days prior to closing with proof of delivery (at this time the only acceptable proof of delivery is via mail so until further notice documents will not be able to be sent or received electronically).


So you can see that lenders and title companies have new rules and regulations to follow and the additional impact on the sale/purchase of a home is that the closing procedure is going to increase by an additional 10 working days (2 weeks) 

So if a closing is scheduled for the 30th of the month the lender has to have all the figures no later than the 20th of the month.

If you are looking to buy or sell a home and need a realtor to help you  then contact me on or call me on 407-287-2393

Linda Sanders Headshot
Phone: 407-287-2393
Dated: August 7th 2015
Views: 555
About Linda: After spending many years working in Corporate Britain working with CEO's, captains of industry, dir...

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