Buying a Home? Without the Consumer Bureau, You Need to Be Your Own Watchdog.
House prices are stubbornly high, and mortgage rates remain substantially above their prepandemic level. Now, with the spring home buying season looming, shoppers have a new worry: A major federal consumer watchdog has been hobbled.
Without the Consumer Financial Protection Bureau, the agency responsible for overseeing most aspects of the home buying process, consumer advocates say home buyers need to be their own watchdogs.
'Now, when you buy a house, you are much more vulnerable to being misled,' said Sharon Cornelissen, housing director with the Consumer Federation of America. 'It's important to be on guard, because guardrails are being taken away.'
Buying a home is the biggest financial decision most Americans will make in their lives. The typical home price is about $397,000, according to the National Association of Realtors, but prices are far higher in some parts of the country. In several California counties, for instance, the median price at the end of last year was over $1.5 million, with monthly mortgage payments over $8,000.
What role has the consumer bureau played in home buying?
The consumer bureau was created after the financial and housing crisis in 2007-8 to streamline oversight of lenders and financial companies serving consumers. Over the years, the bureau has moved to ease the mortgage shopping process by offering simplified forms and educational tools, and has taken action against an array of banks and lenders. In 2022, for instance, the bureau ordered Wells Fargo to pay $3.7 billion for mishandling a variety of customer accounts, including improperly denying thousands of requests for mortgage loan modifications that in some cases led borrowers to lose their homes to 'wrongful' foreclosures.
On Jan. 17, in the final days of the Biden administration, the bureau reached a settlement with Draper and Kramer Mortgage Corporation for discouraging borrowers from applying for loans to buy homes in majority Black and Hispanic neighborhoods in Chicago and Boston. In an email, the lender's lawyers said Draper and Kramer 'considers the matter closed and denies' the bureau's claims, but chose to settle in part to avoid 'protracted legal costs.'
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