Fitch Ratings said on Tuesday that mortgage lenders may see increased costs in compliance, operations and reporting should the Consumer Financial Protection Bureau’s transparency requirement take effect.
The CFPB announced on Monday that the agency will be considering a requirement that lenders issue simplified mortgage statements and provide greater fee and interest rate disclosure to borrowers, MarketWatch reports.
Fitch Ratings said that it remains unclear what sort of effect the new CFPB requirement would have as a tool to increase borrower education. Should a mortgage holder that is already under economic hardship receive a simpler statement and increased disclosure, those tools may be irrelevant. If the mortgage servicers were required to provide consumers with alternatives, many may be more apt to offer foreclosure avoidance options and even modify the terms of the mortgages.
Fitch Ratings also said that recent regulations seem to focus on improving processes related to those mortgages that were products of underwriting and homes that were overvalued, saying that many of these rules will not be relevant to future underwritings, MarketWatch reports.
Fitch Ratings added that the new CFPB requirement would have sweeping implications for the financial industry as the regulator attempts to fulfill its duties mandated by the 2010 Dodd-Frank Act while ensuring that new regulations benefit the American consumer.