Mortgage funds are sometimes a family’s single largest expense, so the phrases of a mortgage significantly influence a family’s monetary stability. When rates of interest decline, many debtors profit from the decrease charges by refinancing their loans. Nonetheless, mortgage refinancing will be more durable to entry for debtors with smaller mortgage balances. Black and Hispanic debtors, who on common have smaller loans, haven’t participated in current refinance booms on the similar price as white debtors.
New streamlined and automated refinancing mortgage merchandise may guarantee that these shopping for a house now, or refinancing to cowl different wants, are in a position to profit from the subsequent rate of interest drop. The CFPB needs to raised perceive what limitations stop individuals from making the most of falling rates of interest and the way competitors will help all households enhance their monetary stability.
We not too long ago launched a Request for Data in search of insights on methods to enhance mortgage refinances for owners who would profit from refinancing, like debtors with smaller mortgage balances. We additionally need public enter on methods to help entry to short-term and long-term help for owners who expertise monetary disruptions, together with by way of automated and streamlined processes.
We welcome feedback from shoppers, collectors, and different stakeholders on their experiences collaborating within the mortgage market, in addition to analysis and different proof. We particularly need enter on:
- Focused and streamlined refinance applications which can be used to enhance refinancing, sometimes with decrease transaction prices than conventional refinances;
- Progressive refinancing merchandise, comparable to automated refinancing, that mechanically set off a suggestion to refinance or mechanically scale back a mortgage’s rate of interest in sure circumstances; and
- Improved entry to short- and long-term loss mitigation help options, comparable to automated or streamlined processes, that will assist owners whose incomes or monetary conditions are affected by occasions, comparable to pure disasters, obtain well timed fee aid that might assist them keep away from foreclosures and supply elevated family monetary stability.
This request for info seeks progressive and well timed concepts to handle persistent market failures and to assist debtors entry useful refinancing together with short- and long-term loss mitigation help. Your enter will assist inform future coverage initiatives, rulemaking, and different mortgage competitors and innovation initiatives.