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CFPB bank mortgage reporting to Increase – impact on Small Business under review

CFPB bank mortgage reporting to Increase – impact on Small Business under review

CFPB bank mortgage reporting to Increase – impact on Small Business under review

Image courtesy of [Sujin Jetkasettakorn] / FreeDigitalPhotos.net

The Consumer Financial Protection Bureau announced today it wants to expand the information it collects about mortgages to make it easier for the agency – and the public – to spot discrimination, risky loans and other problems.

After the nation was caught flat-footed by the mortgage crisis, Congress created the CFPB and ordered it to expand the data home lenders are required to report about their loans. Congress wanted more data about fees, the age and credit scores of borrowers and unique identifiers for loans and loan officers so regulators could better track business practices.

The CFPB says more data is better. It wants to require mortgage lenders to report information about:

• A borrower’s debt-to-income ratio, which indicates whether a consumer has the financial wherewithal to repay a loan

• Reasons for loan denials

• Whether the loan meets the bureau’s Qualified Mortgage criteria for borrower-friendly loans. The bureau says this information will help assess how its rules are working.

• The combined loan-to-value ratio, which banks use to decide how much to charge consumers

• Total origination charges and discount points (the money homebuyers pay to get a lower interest rate) and the interest rate charged on the loan.

What’s in it for bankers? The CFPB says it wants to streamline the reporting process to make it less of a chore for banks. One idea under consideration is to align the data collection with the standard industry forms most banks use to prepare loans for sale to the secondary market.

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