Analysis of CFPB Initiatives
CFPB is going after reduction to closing costs to further benefit consumers, starting from credit agencies and appraisers. I had a privilege to meet the head of CFPB (Consumer Financial Protection Bureau), Director Rohit Chopra, at the Secondary MBA conference. While I listened to him opening remarks at the conference, we had a brief discussion at the MORPAC MBA meeting.
Rohit is focusing to remove as many duplicate fees from the mortgage transactions and capital market transactions as possible. First, focusing on costs of credit reports that went up by 400% since 2022. Next, looking at the Income Verification services that went from $20 per pull in 2016 to over $90 per pull in 2023. He wants more competition for all vendors in the capital markets, data and various reports to remove the price gouging by monopoly players, including title space.
Main focus was on FICO scores cost savings: Equifax, Experian, and TransUnion, lenders often end up paying for essentially the same information six or twelve times. $40 to $60 for a tri-merge report provided by resellers. FICO scores have long been required by all the major secondary market participants, including Fannie Mae and Freddie Mac. FICO itself claims that its FICO scores are used by 90% of top lenders and in 90% of U.S. lending decisions.
What is interesting is the push to "open banking" which involves a shared database, looking directly at applicant-shared information offers lenders a meaningful alternative to check related information. It really sounds like a block chain approach that I was talking about a few videos back.
My firms are working on similar tech for sharing data and I hope to work with many industry players to roll out the next generation of open banking systems.
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CFPB is going after reduction to closing costs to further benefit consumers, starting from credit agencies and appraisers. I had a privilege to meet the head of CFPB (Consumer Financial Protection Bureau), Director Rohit Chopra, at the Secondary MBA conference. While I listened to him opening remarks at the conference, we had a brief discussion at the MORPAC MBA meeting.
Rohit is focusing to remove as many duplicate fees from the mortgage transactions and capital market transactions as possible. First, focusing on costs of credit reports that went up by 400% since 2022. Next, looking at the Income Verification services that went from $20 per pull in 2016 to over $90 per pull in 2023. He wants more competition for all vendors in the capital markets, data and various reports to remove the price gouging by monopoly players, including title space.
Main focus was on FICO scores cost savings: Equifax, Experian, and TransUnion, lenders often end up paying for essentially the same information six or twelve times. $40 to $60 for a tri-merge report provided by resellers. FICO scores have long been required by all the major secondary market participants, including Fannie Mae and Freddie Mac. FICO itself claims that its FICO scores are used by 90% of top lenders and in 90% of U.S. lending decisions.
What is interesting is the push to "open banking" which involves a shared database, looking directly at applicant-shared information offers lenders a meaningful alternative to check related information. It really sounds like a block chain approach that I was talking about a few videos back.
My firms are working on similar tech for sharing data and I hope to work with many industry players to roll out the next generation of open banking systems.
Our social networks:
• Youtube
• Protitleusa.com