Growing Criticism Over the New CFPB Mortgage Tool

Soon after its launching, the new mortgage tool of the Consumer Financial Protection Bureau receives extensive criticism from an increasing number of professional organizations including the Mortgage Bankers Association, the National Association of Mortgage Brokers and the Community Home Lenders Association and the Community Mortgage Lenders of America.

The Owning a Home interactive online guide, which was released in the beginning of January 2015, is designed to educate home buyers on the mortgage process and to help them plan for costs. The consumer is taken throughout the entire process step by step and receives systematized information on loan types, costs and terms used by lenders. The Rate Checker tool is the program component which lenders are concerned over. It is designed to provide mortgage rate estimate based on the consumer’s down payment and credit score, but the provided rates do not include costs such as private mortgage insurance premiums and closing costs.

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The CEO of the MBA, David Stevenson was the first to express criticism over the Rate Checker tool. He referred to it as the “best intentioned mistake” of the CFPB. He explained that the tool discloses the base mortgage rate and nothing more. As a result, consumers will be misled about the actual interest rate which they will be offered when they approach a lender. The National Association of Mortgage Brokers expressed fears that the Rate Checker tool would create confusion among borrowers.

In a joint letter, the Community Home Lenders Association and the Community Mortgage Lenders of America wrote that they saw a number of problems with the tool including potential detrimental effect on home buyers with low and medium income. They have concerns that the tool might mislead borrowers by letting them believe that they would qualify for a mortgage while in fact they will most likely be rejected as a higher mortgage rate will actually be factored in by the lender.



Christian Calvin mortgage Christian is a contributing writer for He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.


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