CFPB Mortgage Refinancing Rates


On Sep. 9, CFPB outlined actions to spur refinancing as rates decline.


  • CFPB director Rohit Chopra remarked on outlook for US mortgage refinancing industry, borrower rights, reducing deceptive fees and cost, and how AI impacts lending sector.
  • Prepared remarks made at the National Housing Conference focused on potential for Fed to lower interest rates at Sep. 17-18 FOMC and impact to mortgage refinancing.
  • Related, CFPB issued Dec. 2023 cash-out refinancing and borrower profile study and Sep. 2023 residential mortgage lending activity report, see #195565 and #186258.
  • Refinancing Landscape and Borrower Obstacles
  • Chopra expects refinancing will increase modestly in the near-term, then more rapidly.
  • Current landscape: more than one-fifth of all mortgages subject to an interest rate over 5% as a result of Fed post-pandemic rate hikes, rates peaking 7.79% Oct. 2023.
  • Opposed to pandemic-era mortgage interest rate lows as low as 2.65% in Jan. 2021.
  • Though refinancing volumes 1H 2024 are the lowest in 30 years, potential for bounce-back in refinancing has significant implications for economic growth and homeowners.
  • This in mind, CFPB is concerned excessive closing costs, non-transparent disclosures re closing cost fees, requirements to take on new title policy are obstacles to refinancing.
  • Bureau is aware of pernicious barriers to refinancingthat include adverse ability for Black homeowners to refinance; deceptive AI in marketing, appraisal, underwriting.
  • CFPB Actions
  • CFPB is preparing for ease in interest rates, seeks to spur more mortgage refinancing.
  • Closely watching implementation of new mortgage technology including those utilizing AI for data analysis or automation, or claim to as a marketing hook to potential clients.
  • How said technologies may contribute to discrimination, collusion, other illegal activity.
  • Exploring changes to existing regulations to streamline refinancing process and reduce closing costs; which costs comply with federal law versus costs that are simply add-on.
  • Pursuing laws to accelerate shift to open banking, specific focus on mortgage industry.
  • Looking to finalize second part of CFPB Personal Financial Data Rights rulemaking to give consumers greater agency over their data, methods to reduce underwriting costs.
  • Rulemaking amends Consumer financial protection act (CFPA) Sec. 1033 (12 CFR X).
  • First of personal financial data rights rules, re attributes for standards setting, finalized Jun. 5 and took effect Jul. 11, 2024; also amends CFPA Section 1033, see #214873.

Regulators CFPB
Entity Types Bank; CNSM; Ins; MG Orig; Servicer; Thrift
Reference Sp, 9/9/2024; CFPA; 12 USC 5301; 12 USC 5641; Citation: 12 CFR X;
Functions Actuarial and Valuation; Operations; Technology; Underwriting
Countries United States of America
Category National Regulator
State
Products AI; Banking; Insurance; Loan; Mortgage; Title Insurance
Regions Am
Rule Type Guidance
Rule Date 9/9/2024
Effective Date 9/9/2024
Rule Id 225558
Linked to Rule :214873
Reg. Last Update 9/9/2024
Report Section US Banking

Last substantive update on 09/12/2024