CUNA attends forum on eClosings, study shows reduced complexity
WASHINGTON (8/6/15)--A Consumer Financial Protection Bureau (CFPB) study on its eClosings project found that borrowers can benefit from the electronic closings process. CUNA and participating credit unions attended a forum Wednesday hosted by the CFPB regarding the eClosings pilot project.
The CFPB first announced the pilot program last year and selected seven financial institutions, including two credit unions. Amy Moser, mortgage services manager, Mountain America CU, West Jordan, Utah, and Lorraine Stewart, vice president of mortgage lending, BECU, Tukwila, Wash., spoke at Wednesday’s forum.
The results of the pilot program indicate that those who closed their mortgage using an electronic platform are generally better off on measures of understanding, efficiency, and feeling empowered than borrowers who used only paper forms.
The pilot program was the result of an April 2014 CFPB study that outlined a number of the most troublesome aspects of the closing process. The study took place over four months, involved more than 3,000 consumers, four technology companies and many settlement agencies and real estate professionals.
Specifically, the report found eClosings could help with:
Increasing consumer understanding. The CFPB examined consumer understanding of the process; terms and fees; and justifications for any differences between quotes and final costs. The study found a 7% positive difference in perceived understanding scores for borrowers using eClosings compared with borrowers using paper documents;
Making closings more efficient. The survey asked consumers about perceptions of delays, errors in the documents and the time between important steps. The study found a 17% positive difference in scores for borrowers using eClosings compared with borrowers using paper documents; and
- Increasing feelings of consumer empowerment. The survey asked consumers questions regarding control over the closing process; and having sufficient time to review documents, ask questions, and flag concerns. The study found a 15% positive difference in the scores for the eClosings borrowers compared with borrowers using paper documents.