With a director finally in place, the Consumer Financial Protection Bureau (CFPB) is wasting no time getting around to helping educate and inform.
The CFPB plans to unveil the prototype for their new monthly mortgage statement for consumers designed to clearly show important information from their mortgage servicer.
The statement will include important line items like the principal owed on the loan, the current interest rate, the next date on which the interest rate could change, a description of late payment fees and a phone number and email address the homeowner could use to contact the company servicing the mortgage, CFPB director Richard Cordray said in an opinion article in Politico on Monday.
Like previous mortgage documents, the prototype will be posted on the agency’s website this week so the agency can get input from the public and industry.
The agency also is working on a new disclosure rule for hybrid adjustable-rate mortgages that would require consumers to be notified months before their first interest rate increase, as well as to be provided with a good-faith estimate of the new monthly payment. Servicers also would have to tell customers about alternatives to try to head off a higher interest rate, such as refinancing.
“The CFPB cannot address all of the problems in the servicing industry in one fell swoop,” Cordray said in touting the agency’s effort to help fix the mortgage industry. “But we are already making important adjustments that will protect consumers more effectively.”
The agency is required under the 2010 financial reform law to put new mortgage servicing rules in place to help consumers, Cordray said. Since the new agency was created by that law, it has focused on improving the disclosures that financial firms provide to consumers.
In May, the agency released two prototypes for shorter, easier-to-understand disclosure forms that lenders would have to give home buyers before they close on a mortgage. The agency has been receiving comments on the prototypes and tested them last month in Philadelphia.