If you think that the Consumer Financial Protection Bureau (CFPB)’s latest consumer “protection” tool will actually give you a clear idea about how much your mortgage is going to cost you, think again. The federal agency’s newest “mortgage education tool” may tell you what kind of rates are theoretically available, but it won’t disclose important information like annual percentage rates, closing fees, and other important data required by Truth in Lending regulations. The National Association of Mortgage Bankers (NAMB) and the Mortgage Bankers Association (MBA) are outraged by the new tool, which purports to help consumers shop around for the best loan, and are loudly calling for the tool’s removal from the CFPB website.

“This tool will do nothing but confuse consumers in their shopping experience,” warned John Councilman, president of NAMB[1]. David Stevens, MBA president, chimed in, “It sets borrowers up for severe disappointment. Both organizations also complain that the tool does not factor in “quality of service” or “closing reputations” of the lenders or other parties involved in the transaction. Councilman went so far as to accuse the CFPB of being disingenuous, arguing, “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.”

Not surprisingly, the CFPB maintained in response that it has created a fantastic consumer-assistance tool that it has no intention of removing from its website. A CFPB spokesman explained that the tool is not intended to be used independently, but as part of a “larger suite” of educational tools intended to “help consumers be more informed and effective mortgage shoppers.” Both NAMB and the MBA said that the CFPB is actually misrepresenting the mortgage industry and causing lenders serious harm by making “the suggestion that licensed mortgage originators are out to get consumers.” Councilman emphasized that the entire industry relies largely on referrals and also complained that the tool implies that mortgage originators can adjust or raise their commissions, something specifically prohibited by the CFPB itself.

by Carole VanSickle Ellis