February 11, 2014

Coleman: APR, mortgage closing docs still confuse

Feb. 11, 2014 – NAFCU, based on comments from its members, is urging CFPB to further consolidate and simplify the mortgage disclosure documents required at loan closing to make the information easier for consumers and lenders to understand.

Mike Coleman, NAFCU's director of regulatory affairs, said the association appreciates the bureau's efforts to streamline the closing process and to work with the financial services industry in doing so.

"We agree with the CFPB's initiative to streamline the amount of disclosure documents consumers receive at closing," Coleman wrote in a letter in response to a CFPB request for information. "However, we believe that these documents can be further consolidated and simplified and would like to work with the CFPB through its Know Before You Know initiative to do that."

CFPB's request for information sought input on what confuses lenders and consumers most about the mortgage process. Coleman said NAFCU's members pointed most often to confusion about the annual percentage rate, or APR, the sheer volume of disclosures involved in the process and errors in calculations.

"As the effective date [of new, combined disclosures] is not until August 1, 2015, NAFCU strongly urges the CFPB to consider doing a follow-up request for information after the rule has been implemented and credit unions have had time to assess the operational difficulties with the closing process," Coleman wrote.