ABA urged the CFPB to “reconsider” and withdraw its new mortgage interest rate calculator. The online calculator, part of the bureau’s “Know Before You Owe” initiative, purports to offer potential borrowers an estimate of interest rates they can find in their local areas.
However the rate calculator only includes “a mix of large banks, regional banks and credit unions” but excludes all community banks, “a segment that represents approximately a quarter of the national mortgage lending activity among banks.” The omission of a large sample of mortgage lenders potentially skews the results, effecting the reliability of the reported interest rates.
Inaccuracies in the data will also confuse customers, ABA warned. The interest rate calculator does not factor in a wide range of mortgage costs, from insurance to points, and it includes only a limited sample of lenders and no assurance of up-to-date data, ABA added.
Read the letter.
View the calculator.