Consumer Financial Protection Bureau Reports Significant Changes in 2022’s Mortgage Market

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The Consumer Financial Protection Bureau (CFPB) recently released its annual analysis of residential mortgage data, revealing several significant trends and changes in 2022’s mortgage market. The report, based on data reported by lenders under the Home Mortgage Disclosure Act, offers key insights into the state of the mortgage industry.

Key findings from the CFPB’s analysis include:

  • A sharp increase in average monthly payments, which rose nearly 46 percent to exceed $2,000 per month. This change, attributed primarily to the rate environment, was accompanied by a significant increase in income-based denials.
  • An increased amount of costs and fees paid by borrowers when taking out a mortgage. This rise is suspected to be partly due to an increase in fees related to discount points, where borrowers purchase a lower interest rate at closing.
  • A 73 percent drop in overall refinancing activity, with cash-out refinances making up the majority of all refinancing activity. These loans allow homeowners to draw on their home equity, possibly for renovations, repairs, or other expenses unrelated to housing.
  • Noteworthy disparities in outcomes for Black and Hispanic borrowers, who faced more challenges in approvals, loan sizes, and fees. However, some of these disparities shrank or disappeared for FHA loans.

In response to these findings, CFPB Director Rohit Chopra stated, “The significant changes in the rate environment in 2022 are having considerable impacts on the mortgage market. I expect these trends will continue in 2023 given further increases in average mortgage interest rates.”

Chopra also noted that the CFPB will focus more on ensuring that borrowers can navigate alternatives to foreclosure during financial distress. The bureau is currently exploring amendments to mortgage servicing standards.

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Furthermore, the CFPB plans to simplify the refinancing process for borrowers and educate them about their options when tapping into their home equity. The bureau will also continue to work with federal and state law enforcement to ensure that mortgage market participants adhere to consumer protection and fair lending laws.

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