Even the most sophisticated home buyer can find mortgages daunting. And that's precisely why the U.S. Consumer Financial Protection Bureau is planning to propose new rules that will simplify things like mortgage points and fees, and bring greater transparency to the mortgage origination loan market, it said in a May 9 statement.
These rules, which the CFPB expects to prop ose this summer and finalize by January 2013, would make it easier for consumers to understand mortgage costs and compare loans so they can choose the best deal.
"Mortgages today often come with so many different types of fees and points that it can be hard to compare offers," bureau director Richard Cordray said in the statement. "We want to bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them."
The agency, created by the Dodd-Frank Act of 2010, is considering proposals that would, among other things, require lenders to offer consumers a no-discount-point loan option, which means homebuyers can compare competing offers from various lenders. Brokerage firms and creditors would no longer be allowed to charge origination fees (known as "points") that vary with the size of the loan. Instead, brokerage firms and creditors would only be allowed to charge flat origination fees.
In addition to regulating origination points and fees, the CFPB will also propose regulations on what kind of qualifications and compensation are necessary for mortgage originators, which includes mortgage brokers and loan officers.
An overview of the rules under consideration can be found here: http://files.consumerfinance.gov/f/201205_cfpb_MLO_SBREFA_Outline_of_Proposals.pdf