CFPB to Launch eClosing Pilot Program

In an effort to create a more consumer-friendly environment, the Consumer Financial Protection Bureau (CFPB) has announced a new pilot program, centered specifically on gathering data from partners using electronic closings (eClosings) to complete mortgages.

In a document outlining the program, the CFPB believes, "[T]here may be opportunities to leverage technology to solve some of the issues that cause frustrations for both consumers and professionals in the mortgage closing process."

The goals of the CFPB program are simple: "[T]o further evaluate eClosing solutions and to determine how these solutions can help achieve the proposed vision for an improved closing process."

Lender's interested in joining the program must already have a partnership with a technology vendor using an eClosing solution, or have a comparable in-house solution that is similar to outside vendor options.

The technical functionality needed for lender participation is straightforward: a way to manage documents and data transfers; a secure technology platform that enables a collaborative workflow; an ability to accept e-signatures; ability to audit transactions; and an ability to sanitize data in order to protect sensitive information.

The CFPB's program aims to study eClosings to judge their utility, as well as make the findings of their study available to the public for consideration and debate. "The intention of this pilot is for the CFPB to conduct targeted research on eClosing solutions and to release the findings publically," the government agency said.

With an increasing interest from lenders to use technology to speed up mortgage transactions, the CFPB study should prove to be an interesting litmus test for the utility of new technologies in the mortgage industry.

"The Bureau looks forward to seeing the creative solutions that will emerge through this pilot program and to partnering with pioneering companies who are helping to advance innovative solutions in the marketplace," the CFPB said.