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New Legislation and the Customer Experience: How One Impacts the Other

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By John Voket

On July 21, 2011, The Consumer Financial Protection Bureau (CFPB) began its work enforcing the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

The CFPB was created to oversee multiple agencies and to watch out for American consumers who are in the market for financial products and services, including mortgages or home equity loans.

While the CFPB is working to better inform and protect consumers, the Stewart group of real estate services companies is poised to educate professionals about the intricacies of the proposed regulations and measures being undertaken to bring greater transparency into the consumer experience.

Stewart is a leading provider of real estate services, including residential and commercial title insurance, through their network of Stewart Title offices across the U.S., lender services, underwriting, specialty insurance and much more, including technology to streamline the real estate transaction and improve the customer’s experience.

Recently, Glenn Clements, Stewart’s group president of Direct Operations, and Marvin Stone, SVP of Business Integration for the Stewart Lender Services Division, sat down to discuss how they see the CFPB affecting the real estate industry and how the CFPB regulations will change the experience for homebuyers and sellers, as well as real estate professionals.

Clements and Stone believe the lender community is keeping pace with how the CFPB will impact its practices, but they want to be sure frontline REALTORS® understand what to expect from new CFPB rules and how those rules might change the closing experience.

“We’re actively reaching out to our customers and gathering input we can feed back into the Bureau to make sure the final outcome achieves the agency’s goals,” Clements says. “Initially, we’re concerned about any disruption this may cause, and we want to minimize any impact to efficiency that might occur by getting ahead of it.”

Stone advises real estate professionals to familiarize themselves with the two new disclosure forms they will be required to use in the course of their clients’ transactions.

“Buyers are going to see a new Loan Estimate form, which will replace the Good Faith Estimate and the early Truth in Lending Disclosure that were traditionally supplied by the lender,” Stone says. “These two forms will be presented as a single form now.” He goes on to say that the new closing disclosure replaces the HUD-1 and final Truth in Lending documents. “The lender and settlement figures are now on both forms,” he adds.

“The Bureau has gone to great lengths to see that the line items on the forms match up,” continues Stone. “The loan estimate and closing disclosure will now look very similar, so consumers won’t have to decipher two different forms.”

Stone believes the new paperwork will initiate “a new level of collaboration between the lender and the settlement agent that we probably haven’t seen before because the forms combine information from the two parties.”

While Clements oversees the Stewart Title Company, he will be directing educational outreach along with sessions for independent agents as the company develops its own standards related to the new processes.

Because consumers will enjoy much earlier disclosure information, Clements believes this will help define and clarify what consumers will expect when they sit down for their closing.

“This will eliminate or minimize any surprises the consumer might otherwise experience at the closing,” Clements says. “That’s a big win for the consumer.”

Stewart already provides an incomparable level of transparency for homebuyers and sellers working with the company’s REALTOR® clients while inviting consumers to be an integral part of the transaction with online software, email updates and mobile apps—making sure everyone in the real estate transaction is in the know at every step.

Both Clements and Stone say the company remains committed to upholding their role as an industry leader and they will continue to inform and guide their clients as the new CFPB regulations are finalized and implemented.

For more information, please visit www.stewart.com.

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