The Consumer Financial Protection Bureau issued a proposal July 24 that would require lenders to disclose more information on mortgages, including homebuyer age and credit score and details about property value and interest rates.
The CFPB said that the rule would update the reporting requirements of the Home Mortgage Disclosure Act — as required by the Dodd-Frank Act — and provide greater insight into consumers’ access to mortgage credit. It also said that it would help simplify the reporting process for financial institutions.
“It is critical that we shed more light on the mortgage market — the largest consumer financial market in the world,” CFPB Director Richard Cordray said in a news release. “The Home Mortgage Disclosure Act helps financial regulators and public officials keep a watchful eye on emerging trends and problem areas in the mortgage market. Today’s proposal would help us understand better how to protect consumers’ access to mortgage credit while simplifying the reporting requirements for financial institutions.”
The CFPB said the data collection also would help it understand the impact of the qualified mortgage rule that went into effect in January; the QM rule requires loans to meet certain criteria in order for underwriters to obtain certain legal protections from buyback demands.
Additional data that CFPB proposes to collect includes lender disclosure of adjustable-rate mortgages and non-amortizing loans that helped propel the nation into financial crisis, as well as reverse mortgages and open-end lines of credit.
Should the proposal go into effect, it likely would exclude small banks from having to report HMDA data if they process fewer than 25 mortgages a year.
The CFPB is seeking comments on the proposal through Oct. 22.
Review the CFPB’s proposal here