An official website of the United States Government
  • Home
  • Blog
  • Take more control over the mortgage closing process with technology

Take more control over the mortgage closing process with technology

By

Closing on a mortgage can be one of the most exciting, and one of the most stressful times of your life. It comes after you’ve chosen your home, scoured the neighborhoods, evaluated the neighboring schools, and exchanged countless pieces of paperwork between your lender, realtor, home inspector, and others. You’ve made offers and finally had them accepted. You’ve been approved for a mortgage, and you have one more step to go before that home is yours: sign a mountain of papers at closing.

Recently, we asked you to tell us about pain points in the mortgage closing process. We also conducted in-depth interviews with consumers like you, realtors, loan officers, attorneys, and others involved at closing to better understand what goes on at the closing table. Through this research, we heard about four major pain points.

Four major pain points

Not enough time to review documents. You told us that you don’t get the paperwork until you arrive at the closing table, where there is pressure to rush through and sign your name over and over – with not enough time to ensure that you understand what you are signing.

Overwhelming stack of paperwork. You told us there are just too many pieces of paper in the stack, making the process of closing on a home daunting and overwhelming. The result is that many of you leave the closing table with a nagging feeling that something hidden in the stack might have long lasting effects on your financial well-being.

Documents are hard to understand. You told us that closing documents are full of legalese and technical jargon, and that you often have little help from others in the closing room to gain understanding.

Errors in the documents. You told us that errors in closing documents can often lead to delays. Even common and seemingly minor errors, such as a misspelled names or forgetting to include your spouse, require closing agents to redo the entire closing package.

Finally, we tested ideas for improvements to the closing process that help you play a more active role in the closing process. Before you sign on the dotted line, we want you to be able to fully understand the terms of your loan, have a chance to carefully review the documents you are signing, and feel empowered to ask the right questions and identify errors in the process.

Piloting a solution

From your comments and our research, it’s clear that the current closing process is not ideal. We identified potential solutions to some of the problems you identified. In particular, ideas for how technology can improve the closing process which we want to test over the coming months. Later this year, we plan to launch an e-closing pilot aimed at encouraging lenders to put you in the driver’s seat of your closing.

Some of our ideas include using technology to:

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

If you want to learn more about the pilot, or are interested in participating, check out the guidelines and solicitation.

We’re excited about some of the promising technologies in the market today and we’ll keep you updated as we learn more about ways that the closing process can be improved. You can check out the report on the current state of closing for more about what we heard.

If you’re facing a specific problem with any part of the mortgage process, you can also submit a complaint online or by calling (855) 411-2372.

  • http://www.mamahadija.com mamahadija

    most of us just skip reading the agreement abd put pen to paper but i think in hindsight its necessary to set aside time to read the fine print

  • http://presidencycollege.ac.in/ leo mathew

    Barandbench is the largest law Firm in Bangalore. Many lawyers from India had face many different cases and also judgments should be give as truely. Most of the Law Firms in India like barandbench are handling cases differently by the advocates . While Justice Chandru as lawyer , he faced many legal Firm cases around 96,000. They have best supreme cort lawyers in India.

  • Guest

    People that complain about the “overwhelming stack of paperwork” need to realize the CFPB is the agency that has created this stack of paperwork. They have made the entire mortgage process so burdensome, it’s a wonder that anyone can buy a home these days!!!!!

    • Greg

      That’s not true. That stack of paper existed long before the CFPB. It’s more a result of banks benefiting from a confusing and complex process to purchase a home and therefore having little incentive to try to streamline and simplify things on the own. The fact that the process still requires paper at all when computers can be made to handle this paperwork for the most part is evidence of that.

      • MsCatsmeow

        Yes, the stack of paper existed long before the CFPB but not because the bank is trying to baffle the consumer. The CFPB likes to pretend that there were no rules or regulations before the Dodd Frank Act but there were – many of them each with specific requirements for notices and documents. Most of them are federal regulations but there are also state regulations, too. The way the rules & regulations were written, it was not possible to “streamline” or consolidate notices because then the bank would be out of compliance with the regulation.

        Example – on a real estate loan in the state of Florida, the bank must give three separate notices regarding hazard insurance. The Notice of Insurance Requirements tells the borrower that hazard insurance is required. The Agreement to Provide Insurance is where the borrower says s/he will keep the property insured. The Statement of Anti-Coercion is where the borrower attests that the insurer was chosen of his/her own free will. Logic would say that these three things could consolidated into one document but they can’t. The regulations require separate notices for each.

        Any attempt by the government to “simplify” just makes things worse. For
        example, the one page Good Faith Estimate was “simplified” into three
        pages. Borrowers had more difficulty understanding it but it’s not the bank trying to bamboozle them – that is exactly what the government decreed should be provided to the consumer. Those regulations and requirements are all still there, too, but now the Dodd Frank Act is adding yet more requirements. The stack of paperwork will get bigger and way more confusing.

The CFPB blog aims to facilitate conversations about our work. We want your comments to drive this conversation. Please be courteous, constructive, and on-topic. To help make the conversation productive, we encourage you to read our comment policy before posting. Comments on any post remain open for seven days from the date it was posted.