The Consumer Financial Protection Bureau (CFPB) has selected seven mortgage companies and five vendors to participate in a pilot program that will gauge whether electronic closings benefit consumers, lenders, and other parties in the housing-finance process. "Mortgage closings can be stressful, confusing, and overwhelming," said CFPB director Richard Cordray. "We believe that eClosings have the potential to create a better process for everyone involved."
The three-month pilot follows a spring report from the CFPB citing problems in the closing process largely due to the reams of physical paperwork required. The watchdog said the pilot will address whether consumers would better understand the closing process if they received educational materials like document summaries and definitions of key terms before closing. It also plans to study how early consumers should be able see closing documents using various technology platforms and whether eClosings can prevent "last-minute surprises and unnecessary bottlenecks caused by outdated processes."