CFPB Launches New Toolkit for Prospective Homebuyers

In its ongoing efforts to better educate prospective homebuyers, the Consumer Financial Protection Bureau (CFPB) has released the latest in a series of tools as part of its “Know Before You Owe” mortgage initiative. 

Your Home Loan Toolkit,” launched Tuesday, provides a step-by-step guide to help consumers understand the nature and costs of real estate settlement services, define what affordable means to them, and find their best mortgage. The Toolkit, however, does not include reference to reverse mortgages specifically.

It joins other such resources in the CFPB’s Know Before You Owe initiative, under which new forward mortgage disclosure rules will take effect for lenders beginning Aug. 1, 2015.  

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“We fully support efforts by the CFPB to help inform and educate consumers who are working through the complexities of the mortgage process,” said  David H. Stevens, president and CEO of the Mortgage Bankers Association (MBA), in a statement. “We look forward to reviewing the details in the Toolkit and providing our input.”

The toolkit is designed to replace an existing booklet that creditors currently must provide to mortgage applicants, which was initially developed by the Department of Housing and Urban Development (HUD).

It will be used in connection with the new Loan Estimate and Closing Disclosure forms that will be implemented in August. Creditors will be required to provide the toolkit to mortgage applicants as a part of the application process, and other industry participants, including real estate professionals, are encouraged to provide it to potential homebuyers, the CFPB says. 

“This toolkit is a great resource for consumers navigating the home-buying process, and will help consumers make well-informed decisions about the biggest financial transaction of their life,” said CFPB Director Richard Cordray, in a statement. “The new mortgage disclosure forms coming in August will help consumers comparison shop for mortgages and avoid surprises at the closing table. We are releasing this toolkit well in advance of the effective date to help the mortgage industry come into compliance with the new rules.”

Written by Emily Study

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  • I agree, I feel the “Your Home Toolkit” is a good thing for our consumers, it should go a long way in helping them understand more about their home purchase costs they will incur.

    However, It would have been great if they had two different tool kits, one for traditional home purchase loans and a completely different one for reverse mortgages! Seniors buy homes as well and maybe even more so in the future!

    John A. Smaldone

    • Hey John,

      When it comes to the theory behind “the toolkit,” I worry less about the legitimacy of the concept than its practical application. Since the CFPB creator is a little footloose when it comes to factual accuracy, such as being a Cherokee Indian, one wonders if “understandability” may take precedent over facts.

      Of course I am one of those idiots who expects that a woman’s current last name is her maiden name, the name of her current husband, or a combination of both. Sometimes it can be embarrassing to call her escort Mr. Warren (her prior husband’s last name) rather than Mr. Mann, her current husband’s last name (but only since 1980 so I guess she is still giving it time to prove out). Perhaps it would be best to call her Senator Herring (her maiden name).

      All I know is that whatever one calls this left leaning Senator, she does not support HECMs. The Senator is left of both former Secretary Clinton and Senator McCaskill. So in my view, it seems that even when facts about reverse mortgages are reported by the CFPB, the message is slightly distorted towards warning off seniors. Perhaps that is biased since it is her appointee who is the current CFPB Director but that is my first reaction.

      • First off, you are not an idiot by any means of the imagination and secondly your view on the senator is right on. However, I can think of another 50 of them that fits the category:)

        Make it a great day,

        John A. Smaldone

      • John,

        While a substantial number of Democrats tend toward the views of Senator Herrington, the majority do not. That is what makes it hard for the Senator to find the base she needs to run for the Presidency.

        You have a great evening.

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