The House Committee on Small Business has released CFPB Director Richard Cordray’s responses to questions raised by the Committee on the potential costs posed to the mortgage lending industry for compliance with forthcoming regulations aimed at simplifying the cost disclosure process. The CFPB will implement a new rule requiring disclosure of key loan terms and associated costs on simplified, standardized forms to be presented to borrowers at multiple stages of the borrowing process. According to the responses, the CFPB estimates total costs to the mortgage banking industry of approximately $100 million, resulting mostly from necessary software upgrades and retraining of staff. Mr. Corday acknowledged that much of this cost likely will be passed on to consumers, but nonetheless insisted that charges per borrower would be low and that the industry would eventually benefit from decreased compliance costs as a result of simpler disclosure forms and quicker, more efficient origination practices.
Alert October 02, 2012