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NAMB—The Association of Mortgage Professionals has joined the Mortgage Bankers Association (MBA) in their criticism of the recent release of "Owning a Home," a suite of tools developed by the Consumer Financial Protection Bureau (CFPB). The CFPB’s “Rate Checker” 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. These are the documents lenders use to calculate what interest rate is available for a particular combination of loan type, property value, loan amount, and credit score.
"This tool will do nothing but confuse consumers in their shopping experience," said NAMB President John Councilman, CMC, CRMS. "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.”
David H. Stevens, president and chief executive officer of the MBA, told HousingWire earlier in the week, “It’s actually disappointing the Bureau would put this out.”
NAMB is calling for the "Rate Checker" Web site to be taken down immediately, as the association states, “before a consumer is harmed by the false rate information dispensed.” NAMB is requesting that all mortgage professionals let their voice be heard by e-mailing email@example.com and remind them:
►The "Rate Checker" site should be taken down because it fails to mention APR, closing costs, and other important information consumers need to know.
►The "Rate Checker" site does not contain rate quotes from licensed mortgage brokers or independent mortgage bankers.
►The "Rate Checker" was released with out 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.
“What is perhaps most egregious is Director [Richard] Cordray's statement that cautioned consumers that [mortgage lenders and brokers] have an ‘important stake in selling the mortgage,’” said Councilman. “What is best for them is not always best for the consumer."
This is just the latest in NAMB’s grassroots efforts to enact change on Capitol Hill.
“The Director [Cordray] should know, since the CFPB issued the regulations, that the loan originator and mortgage brokerage entities cannot increase their compensation,” noted Councilman. “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. The suggestion that licensed mortgage originators are out to get consumers or that consumers should not inherently trust referrals from friends and family is disappointing. 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 Aug. 1, 2015. The Bureau at the very least should have consulted with industry stakeholders to weigh input on the usefulness of such a ‘tool.’”