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Prepared for Takeoff: The CFPB eClosing Pilot Program

Dec 04, 2014

In April of this year, the Consumer Financial Protection Bureau (CFPB) published a report, “Mortgage Closings Today,” regarding issues that consumers are experiencing in the mortgage closing process, including the lack of time to review documents; the overwhelming stack of paperwork; and the complexity of documents and errors.

In a previous article titled, “eClosings–Risky Venture or Wave of the Future?,” we stated that the CFPB identified electronic closings (eClosings) as a solution to address these issues and planned to launch a pilot program that would help them gain a better understanding of the role eClosings can play in helping address consumer concerns.

Recently, the CFPB announced that it has selected 12 vendors and creditors to participate in the three-month eClosing pilot program that will begin later this year. The participants include the following:

►Vendors: Accenture Mortgage Cadence, DocMagic Inc., eLynx, Pavaso Inc., and PeirsonPatterson LLP

►Creditors: Blanco National Bank, Boeing Employees Credit Union, Franklin First Financial Ltd., Flagstar Bank, Mountain America Credit Union, Sierra Pacific Mortgage, and Universal American Mortgage Company.

According to the CFPB, the eClosing pilot program “will explore how the increased use of technology during the mortgage closing process could affect consumer understanding and engagement and save time and money for consumers, lenders and other market participants.”

The pilot program will study many eClosing features, including those that may help the CFPB:

►Further understand how educational materials that can be reviewed prior to closing can help improve the process for consumers;

►Further understand the technologies that would allow consumers to review the closing documents prior to closing and how the early review of documents may affect the consumer’s experience; and

►Study how eClosings can save time and money for both consumers and industry members.

►Collecting data to examine the potential benefits and risks of current eClosing solutions and potential new functionalities aimed at helping the consumer play a more active role in the closing process;

►Highlighting successful solutions in the marketplace to gain a better understanding of how these actors have overcome barriers to adoption and to demonstrate how viable solutions could be adopted more broadly; and

►Enhancing industry dialogue around eClosings, bringing all parties together to tackle barriers to adoption, dispel myths, and foster greater collaboration to improve the closing process.

The eClosing pilot program is part of the CFPB's "Know Before You Owe" initiative, an initiative launched in preparation for the rules regarding the RESPA and TILA disclosure integration and is continuing for this process. To read previous articles or to subscribe to e-mail updates, visit

Ray Hagan is senior regulatory compliance analyst at AllRegs. First introduced in 1989, AllRegs is used by virtually all of the top 100 lenders as well as throughout numerous governmental agencies, including Fannie Mae, Freddie Mac, the FHLBs, FHA, VA, RHS, Ginnie Mae, and more. AllRegs is the exclusive electronic publisher of the Fannie Mae and Freddie Mac Single and Multi-Family Seller/Servicer Guides and the Federal Home Loan Banks’ MPF Program Guidelines. Products include single and multifamily underwriting and insuring guidelines as well as federal compliance laws and regulations, state compliance laws and regulations with plain-language analyses, contract publishing services, and a library of historical guidelines. The educational division, AllRegs Academy, offers virtual and live training, as well as designation and online guides. The Professional Services Group develops custom guides, policy manuals, and other documents on a contract basis. For more information, call (800) 848-4904 or visit

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