Posted on January 27, 2014 - 02:59 PM
by Joel Jadofsky
Top gripe on closings: Not enough time for reviews
WASHINGTON – Jan. 27, 2014 – Since Jan. 3, the Consumer Financial Protection Bureau has been gathering feedback from industry professionals and consumers on problems they encounter during the home closing process. So far, more than 140 people have submitted comments online.
The biggest gripe, so far, centers on how little time borrowers usually have to review documents prior to closing.
“It is not the specific form, but the ingredients of the entirety of forms, the clock ticking, and the seriousness of the commitment of buying a home that applies so much stress that the consumer does not know what to do but just ‘initial and sign here,’” wrote Mark McElroy, chief executive of RamQuest, a title production software company based in Texas. “Let’s provide ample time during the closing process for consumers to be educated and review the necessary forms.”
Other complaints about the closing process that the CFPB has gathered so far involve excessive and redundant paperwork and confusion over the HUD-1 settlement statement and what it means, as well as lenders who don’t have documents ready in time, The New York Times reports.
The findings so far are similar to J.D. Power’s annual survey, released in November, on consumer satisfaction with mortgage lenders. The survey showed that consumers’ top complaints were not having enough time to review closing documents carefully and being unsure of how much money to bring to the closing table. The survey found that customer satisfaction with closings was significantly higher among those who used electronic documents. Quicken Loans, an online lender, ranked the highest in customer satisfaction among primary mortgage lenders, followed by BB&T (Branch Banking & Trust) and U.S. Bank.
The CFPB plans to use the industry and customer feedback it’s collecting to then study how market innovations and technology can be used to help mortgage closings go more smoothly for consumers.