Responding to signs of regulatory voids that the housing downturn has laid bare, the Consumer Financial Protection Bureau is putting together regulations geared to providing better protection for consumers in the mortgage market. The bureau has proposed two sets of rules designed to improve the transparency of costs and customer service.

“The proposal is an effort to truly formalize a level of service and transparency that had not previously been codified,” said Michael S. Waldron, one of the practice leaders of Ballard Spahr’s Mortgage Banking Group.

The rules provide consumers with more easy-to-read mortgage statements, warn adjustable-rate mortgage customers of pending interest rate hikes, and notify customers of inadequate insurance and pricing options before “forced-based” insurance is applied.

Since it’s often difficult for consumers to compare loans with different interest rates, points, and fees, the CFPB has also proposed a rule that requires lenders to make a no-point, no-fee loan option available to borrowers who qualify.

Richard Andreano, Jr., who also leads Ballard Spahr’s Mortgage Banking Group, expressed concern that the consumer may ultimately have less choice as a result of this proposal. “Effectively, they may limit loan products that lenders offer if they have to constrain it to offer no-points, no-fees, particularly if a lender is operating in a higher-cost area where the cost of operations is higher.”