Jan 12, 2012
CFPB to enforce transparency for non-traditional loans
12 Jan 2012
Posted by Andrew Kantor
Mortgage lenders who offer non-traditional loans will have their policies and procedures evaluated by the Consumer Financial Protection Bureau to make sure they aren’t “potentially unfair, deceptive, or abusive” to borrowers.
The CFPB released its guidelines for lenders — what it will look at to be sure that consumers are given accurate and complete information about the loans they apply for.
For example, CFPB will make sure that a lender’s underwriting and appraisal departments are independent of the sales group. That its advertising isn’t deceptive. That the costs of the loan are explained clearly and fully.
Lenders will still be free to offer their non-traditional loans, but the CFPB will make sure that the information they provide is accurate and complete, allowing consumers to make informed decisions. Enforced transparency, as it were.
Click here for the guidelines themselves (PDF, somewhat legalese).