Closing on a mortgage can be one of the most exciting, and one of the most stressful times of your life. It comes after you’ve chosen your home, scoured the neighborhoods, evaluated the neighboring schools, and exchanged countless pieces of paperwork between your lender, realtor, home inspector, and others. You’ve made offers and finally had them accepted. You’ve been approved for a mortgage, and you have one more step to go before that home is yours: sign a mountain of papers at closing.
Recently, we asked you to tell us about pain points in the mortgage closing process. We also conducted in-depth interviews with consumers like you, realtors, loan officers, attorneys, and others involved at closing to better understand what goes on at the closing table. Through this research, we heard about four major pain points.
Four major pain points
Not enough time to review documents. You told us that you don’t get the paperwork until you arrive at the closing table, where there is pressure to rush through and sign your name over and over – with not enough time to ensure that you understand what you are signing.
Overwhelming stack of paperwork. You told us there are just too many pieces of paper in the stack, making the process of closing on a home daunting and overwhelming. The result is that many of you leave the closing table with a nagging feeling that something hidden in the stack might have long lasting effects on your financial well-being.
Documents are hard to understand. You told us that closing documents are full of legalese and technical jargon, and that you often have little help from others in the closing room to gain understanding.
Errors in the documents. You told us that errors in closing documents can often lead to delays. Even common and seemingly minor errors, such as a misspelled names or forgetting to include your spouse, require closing agents to redo the entire closing package.
Finally, we tested ideas for improvements to the closing process that help you play a more active role in the closing process. Before you sign on the dotted line, we want you to be able to fully understand the terms of your loan, have a chance to carefully review the documents you are signing, and feel empowered to ask the right questions and identify errors in the process.
Piloting a solution
From your comments and our research, it’s clear that the current closing process is not ideal. We identified potential solutions to some of the problems you identified. In particular, ideas for how technology can improve the closing process which we want to test over the coming months. Later this year, we plan to launch an e-closing pilot aimed at encouraging lenders to put you in the driver’s seat of your closing.
Some of our ideas include using technology to:
- Help explain key terms, the closing process, and important documents
- Give you more time to review the stack of documents
- Help you find and fix errors in the documents prior to closing
If you want to learn more about the pilot, or are interested in participating, check out the guidelines and solicitation.
We’re excited about some of the promising technologies in the market today and we’ll keep you updated as we learn more about ways that the closing process can be improved. You can check out the report on the current state of closing for more about what we heard.
If you’re facing a specific problem with any part of the mortgage process, you can also submit a complaint online or by calling (855) 411-2372.
Continue Reading
Today, we’re releasing our third Snapshot of Complaints Received from Servicemembers, Veterans and their Families. The report details the data and trends from consumer complaints we’ve received from members of the military community since July 2011.
Here are just a few highlights:
- Debt collection complaints have continued to rise since our last report, and now make up 39 percent of total complaints. It is our largest category of complaints from the military community.
- Credit reporting remains a top category of concern. 72 percent of these complaints are about incorrect information on credit reports. This remains a significant issue for the military community, one that we highlighted earlier this year.
- Student loans are another concern. 49 percent of these complaints are about problems dealing with a lender or servicer. In these complaints, we continue to see long-standing trends, such as servicemembers complaining about not being provided their Servicemembers Civil Relief Act rights.
This year our report also highlights our outreach efforts that allowed us to connect with thousands of members of the military community, as well as three of our enforcement actions that recovered millions of dollars for affected consumers, primarily servicemembers, veterans, and their families. These figures represent the positive impact of the work we continue to do on behalf of those who serve.
Problems with account services
Basic account servicing stands out as a significant area of concern for servicemembers. Most consumers can call their financial institution, visit a branch, or connect online to try and get the help they need to maintain their account. Unfortunately, for military personnel and their families, the realities of military life, including deployments, frequent moves, and a high operational tempo, can sometimes make access to those services extremely challenging.
We found that servicemembers were often subject to a variety of account maintenance or penalty fees, as well as account-access restrictions, which were triggered due to aspects of their military service.
These problems raise concerns that financial institutions may not have a true understanding of the servicing needs of their military customers and may lack proper procedures and protections for them. Detailed examples of servicemember experiences can be found in Section II of the report.
Check out the snapshot to learn more.
We’re listening
As always, if you have a problem with a consumer financial product that you can’t resolve on your own; or if you know someone in that situation, please remember that you can submit a complaint online or by calling (855) 411-2372. We make your voice heard.
