Archives for January 2015

CFPB Owning a Home Tool

Per the MPA: The Consumer Financial Protection Bureau (CFPB), which also released a new “unbiased” tool to help consumers shop for a mortgage. The regulator claims its new “Owning a Home” tool helps borrowers find the best rates in their area based on data the CFPB gathers from lenders.

Source: CFPB

“Most consumers put substantial effort into considering their differing housing needs,” CFPB Director Richard Cordray said in a speech at The Brookings Institute. “But they do not seem to be as careful or as confident in weighing the economic aspects of the mortgage decision, such as what down payment they can afford or what mortgage terms fit their unique financial needs.”

Owning a Home is a suite of tools to inform and empower consumers shopping for a mortgage, taking the consumer from the very start of the home-buying process, with a guide to loan options, terminology and costs, through to the closing table with a closing checklist.

Included in the suite of tools is the Rate Checker. In its beta release, this tool helps consumers understand what interest rates may be available to them by using the same underwriting variables that lenders use on their internal rate sheets.

“In other words, we are giving consumers direct access to the same type of information that the lenders themselves have,” said Cordray.

“And let me take a second to debunk a popular myth: You can shop around for a mortgage and it will not hurt your credit score. Within a certain window of time – generally between 14 and 45 days – multiple credit checks from mortgage lenders or brokers are treated as a single inquiry,” he added.

This is because other creditors realize that borrowers are only going to buy one home at a time, and in turn, it permits borrowers to shop around and even submit multiple applications to obtain multiple initial estimates.

“For these reasons, it is vital that consumers meet with several lenders early on and ask lots of questions, but wait until they receive official loan offers to make their final selection,” said Cordray.


Last week FHA announced it will reduce MIP (Mortgage Insurance Premium) by .50% to .85%.  This might help slightly increase FHA activity but not much.  If the FHA wants to have a bigger impact and create more loans they’ll need to reduce this further along with the reduction of the upfront MIP of 1.75%.