U.S. lenders would be required to offer the option of home loans without points or fees under a proposal by the Consumer Financial Protection Bureau designed to allow borrowers to better compare prices.
The rule, released under the Dodd-Frank Act, would also require that borrowers who choose to pay an upfront point or fee receive an actual reduction in interest rates, the agency said in a statement today. The points or fees should serve to reduce a consumer’s monthly loan payments, the CFPB said.
“Consumers have a hard time comparing loans when they are dealing with a bewildering array of points and fees,” Richard Cordray, CFPB director, said in the statement. “We want to provide consumers with clearer options and enable them to choose the loan that they believe is right for them.”
The agency, created in 2010 by Dodd-Frank, intends to complete the regulations by January. The regulations would also set standards for mortgage originators, including requiring screening for felony convictions.
Editors: Lawrence Roberts, Gregory Mott