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Home / Finance News / Improvements To The Mortgage Closing Process On The Horizon


The Consumer Financial Protection Bureau (CFPB) is a relatively new agency and has been taking fire from all directions since its inception. Despite having to duck and run, the CFPB has steadily worked to improve the financial sector for consumers. The latest focus of the agency is the mortgage process, chiefly the closing process. According to a recent report from the CFPB, when finalizing a mortgage, consumers are ”confused, frustrated and feel pressured to sign documents they haven’t had a chance to read”. The CFPB is working to improve the closing process and take some stress off of borrowers, but consumers can help themselves in two easy ways: ask every question that comes to mind and being prepared going into the mortgage process. Scott Sheldon, a consumer advocate and loan officer in California, says:

”Consumers are going to need to come up with their questions. Make the lender do the initial legwork upfront. A lot of lenders feel like the consumer knows what they’re doing, because it’s easy for us, we do this every day.”

Typical Problems

Most consumers only go through the mortgage process twice during their lifetime, so they are not as familiar with it as loan officers are. This has led to several complaints to the CFPB. The three most common are: consumers felt as if they didn’t have enough time to review closing documents, the amount of paperwork was overwhelming and confusing, and many documents had errors on them. Many borrowers also felt as if their questions were either ignored or not fully answered by mortgage and real-estate professionals.

To help combat these complaints, the CFPB has launched a new initiative. The ”Know Before You Owe” mortgage initiative began in November of 2013 and consumers will begin to see its effects by 2015.

Changes to Expect

  • August 2015…a new group of closing disclosures will be given to consumers three days(or more) prior to closing. These will include easier-to-understand disclosures with the intent of giving consumers more time to ask questions and compare costs.
  • An eClosing pilot program…the program ”is designed to enable the CFPB to better understand the role that eClosings can play in addressing consumers’ pain points”, according to the agency. ”Electronic documents and e-signatures hold promise, although there’s concern that click-happy consumers may simply electronically riffle through important documents rather than actually read them,”, says Chris Birk, who is the director of content development for Veterans United Home Loans.
  • Changes to disclosures and documents…as soon as the summer of 2014, there are changes to be made to several of the documents during the closing process. Each change is intended to make the process more clear and easier to understand. The changes will also provide some documents to consumers earlier in the process, allowing them more time to comparison shop their loan with different lenders.

Since buying a home is often the largest investment the average consumer makes during their lifetime, clarity is essential. Hopefully, the CFPB will continue to streamline the process.


About the author: Jerry Coffey


Jerry Coffey spent many years in a debt-riddled gray area somewhere between broke and desperately broke. His seemingly endless need for more and more cash led him to payday loans, repossessions, bankruptcy, and depression. After years of the same financial style, he heard a piece of advice that inspired him to find a way to change. The advice: ''The very definition of a fool is someone who continues to do the same things, but expects different results.'' This led him to a much more frugal lifestyle that sees all of his bills paid on time and a growing savings account. Even the seed of a retirement account has begun to sprout.


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