CFPB Issues Electronic-Closing Pilot Guidelines and Seeks to Use Technology to Improve Mortgage Closing Experience

24 April 2014 Consumer Class Defense Counsel Blog

The Consumer Financial Protection Bureau (CFPB) recently announced that it is launching an electronic-closing (e-Closing) Pilot program designed to address some of the most common concerns relating to the mortgage closing process. CFPB states that electronic closing has the potential to address current challenges by shifting the closing experience toward a more paperless process and by facilitating other consumer-friendly improvements. Common consumer concerns relating to the current mortgage closing process include:

  • Not enough time to review documents – consumers indicate that they do not receive the paperwork until they arrive at the closing table, where there is pressure to rush through and sign the documents without enough time to ensure that they understand what they are signing;
  • Overwhelming stack of paperwork – consumers indicate that there are too many pieces of paper involved and that many leave the closing table with uncertainty that something hidden in the paperwork might have long lasting effects on their financial future;
  • Documents are difficult to understand – consumers indicate that the closing documents are full of legal and technical jargon and that they often have little help from others in the closing room to gain adequate understanding.
  • Errors in the documents – consumers indicate that common errors in closing documents, including misspelled names, can often lead to delays and may require the closing agent to redo the entire closing package.

CFPB’s e-Closing Pilot seeks to explore ideas to improve the closing process using technology and is aimed at encouraging lenders to place consumers in control of their mortgage closing. The e-Closing Pilot encourages the use of technology to:

  • Help explain key terms, the closing process, and important documents;
  • Give consumers more time to review the stack of closing documents;
  • Help consumers find and fix errors in the documents prior to closing.

Additional information regarding the e-Closing Pilot and the current state of closing is available on the CFPB webpage.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.

Related Services