U.S. Consumer Bureau Proposes New Rules On Mortgage Points

The Consumer Financial Protection Bureau has proposed new rules on mortgage points and fees imposed by lenders. According to Bloomberg, the rules are set to take effect this summer and are intended to simplify the way lenders market mortgages. The new requirements obligate lenders to provide a rate reduction for each point, or percentage of a loan that the borrower pays up front. Lenders offering such incentives would be required to also offer a no point loan option to borrowers as an alternative. The new rules would eliminate point based origination fees, while still allowing origination fees charged at a flat rate. According to Richard Corday, the bureaus director, the changes are being made in an effort to "...bring greater transparency to the market so consumers can clearly see their options and choose the loan that is right for them.”

Do you think these rules will help borrowers choose better loans?

Mortgage Complaint Hotline for Borrowers

The Consumer Protection Bureau has created a new mortgage complaint hotline to help borrowers deal with unresponsive lenders. According to the Los Angeles Times, the hotline went live on Dec. 1 but has not been widely publicized. The program is developed similarly to agency's credit card dispute hotline where customers submit a complaint which is forwarded to the lender. The lender then reports back to the bureau with a resolution that is sent to the consumer for review. Throughout the process, borrowers will be able to log into a portal or call a toll free number to receive updates on their case. The complaint hotline is accessible online at http://www.consumerfinance.gov and by toll-free phone between 8 a.m. and 8 p.m. Eastern at (855) 411-2372.

With the number of pending foreclosures today, do you think this hotline will be effective in resolving mortgage dispute issues?