NAMB President John Councilman has announced the Association’s opposition to the Consumer Financial Protection Bureau’s recently introduced Rate Checker. The CFPB previously stated that “This tool helps consumers understand what interest rates may be available to them by using the same underwriting variables that lenders use on their internal rate sheets.”
“This tool will do nothing but confuse consumers in their shopping experience,” Councilman said.”These rates do not account for closing costs, APR, Loan Level Price Adjustments or other key factors. More important than rate, is quality of service and closing reputations of others involved in the transaction. If a private company released this exact product, the CFPB and state regulatory authorities would have a team sent in to shut the site down.”
Councilman went on to state, “What is perhaps most egregious is Director Cordray’s statement that cautioned consumers that [mortgage lenders and brokers] have an “important stake in selling the mortgage……What is best for them is not always best for the consumer.”This statement is nothing but divisive, naive, or dishonest; or all three. First, the Director should know, since the CFPB issued the regulations, that the loan originator and mortgage brokerage entities cannot increase their compensation. Those are set and cannot vary per Dodd/Frank and CFPB regulation. Second, mortgage originators, whether they work for banks, mortgage banks, credit unions, or mortgage brokers, all depend on future business by dealing with consumers fairly.”
Councilman also emphasized his disappointment that the CFPB seemed to suggest that licensed mortgage originators are “out to get” consumers or that consumers should not inherently trust referrals from friends and family. “Lastly, why would the Bureau launch a ‘rate checker’ that will confuse consumers if it is to be used in conjunction with the new forms that the industry and CFPB have been developing together for over two years to help consumers shop for a mortgage? The new forms are set to launch August 1, 2015. The Bureau at the very least should have consulted with industry stakeholders to weigh input on the usefulness of such a ‘tool.’”
He noted that the “rate checker” web site should be taken down immediately before a consumer is harmed by the false rate information dispensed.
The Mortgage Bankers Association also has criticized the CFPB’s new program.
Councilman’s announcement requested that all mortgage professionals “let their voice be heard.” He suggested that e-mails be sent to email@example.com to emphasize that:
1) The “Rate Checker” site should be taken down because it fails to mention APR, closing costs, and other important information consumers need to know
2) The “Rate Checker” site does not contain rate quotes from licensed mortgage brokers or independent mortgage bankers
3) The “Rate Checker” was released without any input from industry stakeholders such as NAMB, MBA, and NAR. If the CFPB truly wants to get it right, they should work with the industry for complete accuracy and fairness.
“Please CC your congressman and firstname.lastname@example.org on the email.”