WASHINGTON — The Consumer Financial Protection Bureau has chosen a dozen firms involved in the mortgage industry — including two credit unions — for a pilot program looking at whether electronic fillings can improve the mortgage closing process.
The list released Thursday includes seven mortgage lenders and five vendors that provide support services, including software firms.
The two CUs involved in the study are Boeing Employees Credit Union in Tukwila, Wash., and Mountain America Credit Union in West Jordan, Utah.
The other financial institutions are Blanco (Texas) National Bank; Flagstar Bank in Columbia, Md.; Franklin First Financial in Towson, Md.; Sierra Pacific Mortgage in Folsom, Calif.; and Universal American Mortgage Company in Chantilly, Va. The vendors are Accenture Mortgage Cadence of Denver; DocMagic Inc. of Torrance, Calif.; eLynx of Cincinnati; Pavaso Inc. of Plano, Texas; and the law firm PeirsonPatterson LLP of Dallas.
The three-month pilot program, which will begin this year, will test whether so-called eClosings save time and money for consumers, lenders and other related parties, according to the CFPB.
"Mortgage closings can be stressful, confusing, and overwhelming," CFPB Director Richard Cordray said in a statement.
"We believe that e-closings have the potential to create a better process for everyone involved," he said. "This e-closing pilot project will provide valuable insight as we work to improve the closing experience for consumers."
The pilot follows a report the CFPB released in April that identified difficulties in the closing process largely due to the massive amounts of physical paperwork required.
"The pilot project, a follow-up to the April report, will enable the CFPB to better understand the role that e-closings can play in addressing consumers' pain points," according to the agency.
The pilot program will address whether consumers would better understand the closing process if they received educational materials such as document summaries and definitions of key terms prior to closing, according to the CFPB.
The agency also plans to study how early consumers should be able see closing documents using various technology platforms and whether e-closings can prevent "last-minute surprises and unnecessary bottlenecks caused by outdated processes."
The pilot program isn't part of a rule-making process, but it "is designed to identify best practices in the marketplace," according to the CFPB.
