Rule to Improve Consumer Credit Access for Mortgage Market

For consumers who have previously filed for bankruptcy or have general concerns about their access to credit, a new rule may provide some help. According to a recent news release from the Consumer Financial Protection Bureau (CFPB), the agency has “finalized a rule to improve information reported about the residential mortgage market.” What will the rule do? In short, it will update the reporting requirements for the Home Mortgage Disclosure Act (HMDA). By updating reporting requirements, we will have better knowledge of consumer access to mortgage credit.
What is the Largest Consumer Financial Market? The Mortgage Market
If we want to ensure that Chicago consumers are continuing to recover from the financial crisis and are bouncing back after filing for personal bankruptcy, we need to know more about how the largest consumer financial market in the world is working. What is the largest consumer financial market in the world? According to the CFPB Director Richard Cordray, it is America’s mortgage market. With the finalization of the new rule, Cordray explained, the CFPB is “shedding more light to foster better understanding of the market, and also ensuring that lenders have sufficient time to come into compliance.”
What is the relationship between consumer protection and the HMDA? According to the news release, the HMDA has requirements that ultimately provide us with some of the following information:
  • Details of home loan applications received; and
  • Details for home loans originated or purchased.
What can consumers do with that information? We can attempt to determine whether discriminatory lending patterns exist, and we can also use the information to keep checks on whether mortgage lenders are actually serving housing needs of consumers and our communities. Regulators can also look to this information to assess similar issues, as well as to help distribute “public-sector investment so as to attract private investment to areas where it is needed.”
Improving Consumer Experiences
Why does the HMDA need an update? It was created in 1975, but the Dodd-Frank Act required the CFPB to expand the information provided through the HMDA. In short, the writers of the Dodd-Frank Act wanted to see more information about consumer applications and mortgage loans in order to understand the ins and outs of the mortgage market. By examining nearly 12 million applications, pre-approvals, and loans for mortgages, the CFPB developed the new rule, which aims to “improve the quality and type of HMDA data.”
For the CFPB, increasing knowledge about the mortgage market is a twofold process: it means making data on mortgage applications and loans more accessible to consumers, but also streamlining the ways in which financial institutions report their data.
Recovering from Consumer Bankruptcy and Buying a House
With the CFPB’s rule providing more information about consumers and the mortgage market, many Chicago residents who have filed for bankruptcy—or who are thinking about filing for consumer bankruptcy—are likely to have questions about their own access to the mortgage market. It is important to keep in mind that personal bankruptcy does not prevent you from applying for and being approved for a mortgage.

You should discuss your situation with an experienced Oak Park bankruptcy attorney as soon as possible. Contact the Emerson Law Firm today to learn more about your options.
See Related Blog Posts:
Deceptive Debt Collection Practices Targeted by CFPB

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