On September 9, CFPB Director Rohit Chopra spoke at the National Housing Conference on how a decrease in interest rates could impact mortgage refinancing. Chopra noted that over a fifth of all mortgages currently have interest rates above 5 percent and that millions of borrowers could benefit from refinancing as interest rates decline. Despite the economic benefit that homeowners could receive from refinancing, Chopra emphasized that the costs of the process could serve as a barrier to many borrowers. Chopra also argued that, based on previous refinancing history, there were concerns that minority homeowners and those in less affluent neighborhoods would be less likely to benefit from refinancing opportunities.

To encourage more refinancing, the CFPB will: (i) closely monitor the implementation of new mortgage technologies like AI; (ii) explore the need to change existing mortgage regulations to reduce closing costs and streamline refinancing processes; and (iii) pursue rules to shift to “open banking,” which the CFPB believes could lower underwriting costs.

Chopra concluded his remarks by stating uncertainly whether the predicted interest rates cuts would relieve many homeowners of high monthly mortgages. However, he concluded that “[i]f we can collectively refinance millions of mortgages in neighborhoods across the country, it will be a huge boost for those families and their local economies.”