CFPB to Digitize Mortgage Closings Under New Pilot

The Consumer Financial Protection Bureau will call upon its technological capabilities via new pilot project that it intends will further simplify the mortgage closing process.

The agency released details of the pilot Wednesday via its website and is currently seeking participants to test the technology that will aid in the mortgage closing process. 

Streamlining the mortgage closing process has been a longtime priority for the federal agency from overhauling closing documents to becoming more technology-friendly. Now, the CFPB says it is targeting four major complaints of the closing process: overwhelming paperwork, confusing documents, errors in documents and not enough time to review documents. 

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“From your comments and our research, it’s clear that the current closing process is not ideal,” the CFPB writes. “We identified potential solutions to some of the problems you identified. In particular, ideas for how technology can improve the closing process which we want to test over the coming months. Later this year, we plan to launch an e-closing pilot aimed at encouraging lenders to put you in the driver’s seat of your closing.”

The agency offered guidelines for those interested in participating in the pilot to address those issues, one of the requirements being minimum technology standards that will facilitate eSignatures. 

In February, the CFPB expressed approval for a recent announcement from the Department of Housing and Urban Development to allow lenders to accept electronic signatures on Federal Housing Administration mortgage loans. 

This approval arrived less than a month after the agency began soliciting public comments on ways to improve the mortgage closing experience for both consumer and lenders. 

Written by Jason Oliva