U.S. mortgage-application rules to be released by the Consumer Financial Protection Bureau will yield benefits for both borrowers and lenders, CFPB Director Richard Cordray said in a CNBC television interview.
Paperwork-reduction measures planned by the bureau, which was created under the 2010 Dodd-Frank Act, will be designed to “cut red tape” and ensure homeowners are better able to “navigate and understand their choices,” Cordray said today.
“The rules we’re writing here will be good for industry and for consumers because they should allow people to be able to feel that it’s a reliable market,” said Cordray, who sued mortgage lenders over allegations of fraudulent foreclosure practices while serving as Ohio’s attorney general. “That should all be good for participation in the long term here.”
The consumer bureau will complete proposals for simplifying the mortgage-application process “this summer” with an eye toward completing new rules by January, he said.
Lenders must work with the CFPB to improve access to credit for borrowers as banks return to profitability in the wake of the subprime mortgage crisis, Cordray said.
“It doesn’t help to protect consumers if they can’t get a loan,” he said.