The CFPB today issued a request for information asking for input on ways to improve mortgage refinances for homeowners who would benefit from refinancing, specifically for borrowers with smaller loan balances. The agency also wants feedback on methods to support automatic short-term and long-term loss mitigation assistance for homeowners who experience financial disruptions.
The CFPB intends to use the information as it considers steps to support household financial stability and address refinance market gaps. Refinancing mortgage could be harder to gain access to for borrowers with smaller loan balances, based on the CFPB, which also noted that Black and Hispanic borrowers, who on average have smaller loans, haven't took part in recent refinance booms in the same rate as white borrowers.
Refinancing volume is down almost 70% from this past year as rates of interest have risen. New streamlined and automatic home mortgage refinancing products might make sure that those people who are buying a home now or refinancing to cover other needs are able to benefit from the next rate of interest drop, the CFPB said. The agency is interested in the features of pandemic-related forbearance programs that might be made more generally available to borrowers.
The CFPB is requesting information on multiple elements, including: targeted and streamlined refinance programs which have been accustomed to improve refinancing, typically with lower transaction costs than traditional refinances; innovative refinancing products, for example one-way adjustable rate mortgages or loans which include automatic refinancing, that might automatically trigger a deal to refinance or automatically reduce a loan's rate of interest in certain circumstances; and automatic forbearance and long-term loss mitigation assistance, which could help make sure that homeowners whose incomes or financial situations are influenced by events for example natural disasters can receive timely payment relief that may help them avoid foreclosure and provide increased household financial stability.
2 comments