Page 1 of 22 **BUREAU O F CONSUMER FINANCIAL PROTECTION** 

**PAPERWORK REDUCTION ACT SUBMISSION**

I NFORMATION COLLECTION REQUEST

SUPPORTING STATEMENT PART A **[ OWNING A HOME EVALUATION STUDY**  **] (OMB CONTROL NUMBER: 3170** 

**- XXXX)** 

General Instructions

The Supporting Statement is the heart of an “information collection request” (ICR) to the Office of Management and Budget (OMB). A completed Supporting Statement A must accompany each request for approval of a collection of information. The Supporting Statemen t should be prepared in the format described below, and must contain the information specified below. If an item is not applicable, provide a brief explanation. When the question “Does this ICR contain surveys, censuses, or employ statistical methods?” is marked "Yes," then a Supporting Statement B must be completed. OMB reserves the right to require the submission of additional information with respect to any request for approval.

The Supporting Statement is a public document and should be written in a ma nner that provides the average person with an understanding of why information must be collected and what use you will make of the information. The entire ICR package is entered into and submitted to OMB for review and approval via ROCIS. It is available t o the public at www.reginfo.gov

.

General Guidelines:

• All Supporting State responses should be written in plain English with acronyms, programs, organizations, etc., fully spelled out. No level of program understand ing should be assumed. Remember, these documents are for the public.

• Try not to use N/A as a response to a question. If you feel a question does not apply, answer appropriately in a full sentence. For example, a good response to question #9: “Explain any decision to provide any payment or gift to respondents, other than remuneration of contractors and grantees” would be: “There are no plans to provide any payments or gifts to respondents.”

• While there are a number of questions that must be answered in each Supporting Statement, an “Introduction” section may precede the actual questions and responses if it could help the reader understand the context around an information collection.Page 2 of 22 TERMS OF CLEARANCE: [This information is found on a previous submission’s “Notice of Action” for approval. List previous “Terms of Clearance” here. Briefly explain how the terms were addressed. If none, enter “None.” If a new collection, enter “Not applicable. This is a

requ est for a new collection of information. ”]

ABSTRACT: [Provide a brief description of this collection of information; including a description of respondents, what information is collected, why it is collected, and how it will be used. This statement should be what you want to appear on www.reginfo.gov and in the 60 and 30 day Federal Register notices.]

The Dodd Frank Act directs the Consumer Financial Protection Bureau (CFPB) to develop a program of consumer education and engagement. As part of that program, the CFPB ha s developed a suite of online tools and resources to help consumers make better, more informed decisions about mortgages. Collectively, these tools and resources are known as the Owning a Home project.

The purpose of this information collection is evaluat e and improve the Owning A Home project. The CFPB seeks to gain insights as to (1) whether and how the Owning a Home project impacts consumers; (2) which consumer segments or profiles benefit the most from the Owning a Home project; (3) the mechanisms by w hich the Owning a Home project impacts consumer behavior and attitudes; (4) general consumer behavior, attitudes, and approaches to obtaining a mortgage and mortgage shopping; (5) the validity of certain hypotheses underlying the development of the Owning a Home project.

To answer these questions, the CFPB intends to conduct a field study of the Owning a Home project. We will recruit prospective homebuyers and assign them to one of two study groups: those exposed to the Owning a Home tools or resources (th e treatment group s ) and those not exposed to Owning a Home (the control group). We will survey both groups of homebuyers as they go through the process of shopping for and acquiring a mortgage, and we will track the treatment group’s usage of the Owning a Home web tools and resources. We will then compare the two groups’ attitudes, behaviors, and outcomes.

A. JUSTIFICATION

1. Circumstances Necessitating the Data Collection

[Explain the circumstances that make the collection of information necessary. Identify any legal or administrative requirements that necessitate the collection.

Your response should cover the need for this information collection. Include specific references to statutes, executive orders, regulations, notices or other relevant infor mation that you believe directs you to collect the information at issue. You should also include copies of such documents as attachments to this Supporting Statement. After reading your response to this question, aPage 3 of 22 reader should have a full understanding o f why the CFPB must collect this information.]

The Dodd Frank Act directs the Consumer Financial Protection Bureau (CFPB) to “to educate and empower consumers to make better informed decisions.” As part of fulfilling this

mission , the CFPB has developed a suite of online tools and resources to help consumers make better, more informed decisions about mortgages. Collectively, these tools and resources are known as the Owning a Home project.

In order to ensure that the CFPB’s tools are as effective as possi ble, and to ensure that resources

are well

- spent, the CFPB must study the impact of the Owning A Home project. The CFPB seeks to gain insights as to (1) whether and how the Owning a Home project impacts consumers; (2) which consumer segments or profiles be nefit the most from the Owning a Home project; (3) the mechanisms by which the Owning a Home project impacts consumer behavior and attitudes; (4) general consumer behavior, attitudes, and approaches to obtaining a mortgage and mortgage shopping; (5) the va lidity of certain hypotheses underlying the development of the Owning a Home project.

2. Use of the Information

[Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the agency ha s made of the information received from the

current collection. Be specific. If this collection is a form or a questionnaire, every question needs to be justified. The following checklist provides a useful tool to answering this question:

• What information will be collected, reported

, or recorded? Are there any pieces of information that are especially burdensome in the collection? What are they and why are they necessary?

• From whom will the information be collected? If there are different respondent categ ories (i.e., loan applicant versus bank), each should be describe along with the type of collection activity that will apply.

• How will you use this information? Include all uses. If additional uses arise after OMB has cleared this ICR, you will need to re vise the supporting statement and re

- submit for OMB’s approval.

• How will the information be collected (e.g., forms, non

- forms, electronically, face

- to

face, over the phone, over the internet)? Does the respondent have multiple options for providing the in formation? If so, what are they?

• How frequently will the information be collected?

• Will the information be shared with any other parties outside of the CFPB?

• If this is an ongoing collection, how have the collection requirements changed over time?

Be specific when answering this question. To say the collection of information is necessary to “ensure compliance” or “for program evaluation” is too general. In these cases, you would want to provide specific examples of how certain information will be used to determine compliance or what area of program is being evaluated and how the information collected will enable thatPage 4 of 22 evaluation to occur.]

Use of the information This information will be used to inform CFPB’s future work on the Owning a Home project. It

will also inform

– at a high level

– CFPB’s overall approach to consumer education and

engagement. As described in more detail in section 4, the Owning A Home project is premised on two key hypotheses: (1) that shopping in the mortgage market leads to bet ter consumer outcomes; and (2) that consumers often do not shop for a mortgage because shopping in the mortgage market is difficult, confusing, and generally discouraged by the market structure. The Owning A Home project seeks to remedy this situation by encouraging consumers to shop for mortgages and supporting and empowering them with user

- friendly tools and resources designed to make shopping easier and give consumers greater confidence when shopping.

This study will inform CFPB’s future work on Ownin g A Home as well as its overall approach to consumer education and engagement in several ways. First, the study will h elp us understand

to what extent

– and for what specific consumer segments or profiles

– the above hypotheses are

true. There is some su pport in existing literature and much anecdotal wisdom to support these hypotheses, but little solid research. This study will contribute significantly to the baseline factbase on which the CFPB and other governmental agencies and community intermediaries

operate.

Second, the study will help us understand more about how the market and behavioral forces implicit in these hypotheses work in practice, which will help inform both the Owning a Home project and related programs the CFPB might develop in the fut ure. Third, the study w ill help us

understand to what extent, in what specific ways, and for what specific consumer segments or profiles the Owning A Home suite is effective at encouraging consumers to shop and mitigating

the market conditions and behavio ral forces that discourage shopping. This nuanced information will help the CFPB refine and improve the Owning A Home suite over time.

The CFPB intends to publish aggregate and overall findings from the study so that other researchers and agencies may be nefit from the work, but it will not make raw data available to other agencies or parties. This is a one

- time research study

. There are no plans to collect this

information on an on

- going basis.

Collection of the information The target audience for the Owning a Home project is prospective homebuyers. Thus, the study will attempt to replicate this target audience by recruiting respondents from among prospective homebuyers. Respondents will be asked to complete a short screening questionnaire first in

ord er to determine if they are eligible. Data obtained in the screening questionnaire does not contain any directly identifying information and will be analyzed only in the aggregate to assess which eligibility criteria have the most impact on disqualifying individuals. Upon completing the screening questionnaire, respondents are presented with informed consent language and asked to opt

- in to the study.

Respondents will be asked to provide information in three primary ways. First, respondents willPage 5 of 22 be asked to complete several short surveys, approximately two weeks apart, for approximately

three months. Second, respondents will be asked to consent to automated tracking of the Owning

a Home website. Third, respondents will be asked to submit their mortgage doc uments.

The survey component will include questions on consumers’ current attitudes and behaviors around shopping for and acquiring a mortgage. These questions will explore consumers’

attitudes to learn how consumers think about and perceive the mortgage shopping/acquisition process, and consumers’ behaviors to learn more about what consumers actually do when shopping for or acquiring a mortgage. The control group will help us understand more about the status quo, while the treatment group will help us und erstand how Owning a Home can alter that

status quo.

The online tracking of Owning a Home usage will help us learn more about what types of consumers are best served by the Owning a Home project, and what pieces of the Owning a Home experience are most ef fective in improving consumer attitudes and behaviors.

Finally, the collection of mortgage documents will enable us to learn whether changes in attitudes and behaviors produced by Owning a Home actually lead to improvements in consumer

outcomes , i.e. lowe r

- priced or more appropriate mortgages

. It is important to collect these

documents because data obtained from self

- reporting of complex financial transactions is extremely unreliable. Any personally identifiable information present on these documents will be redacted prior to delivery to the CFPB.

Survey The survey for this evaluation is organized into 10 modules . A brief description of the modules is as follows, with additional j ustification below.

Module Description of questions A: Screening and background Involvement in the mortgage industry and in household’s financial decisions. Plans to buy a home, and if so, when. B: Stage of the home buying process Participants’ stage of the home buying process and mortgage search process (e.g. whether they have made an offer on a home).

C: Information sources

used Identification of the sources used to learn about housing and mortgage options, and frequency of usage. D: Empowerment Participants’ confidence in searching for and evaluating mortgage information and

offers. E: Knowledge of the

mortgage process Factual questions on mortgages, including concepts like discount points and mortgage insurance. Beliefs about real estate agent s and lenders.

F: Beliefs about the mortgage market Expectations regarding financial terms, including purchase price, clo sing costs, and

interest rates. G: Request for

documents Instructions on how to provide documents. If a participant opts not to submit a HUD

- 1, they are instead asked a series of questions about that document.

H: Correlates Time preference; Risk preference; Financial literacy; Need for cognition; Numeracy; Locus of control (internal vs external); Co gnitive reflection I: Demographics Basic demographic and socio

- economic information including race/ethnicity, income, employment status, gender, and age. Financial information relevant to mortgage search. J: Wrap

- up Open

- ended f eedback from participants on the survey; treatment reinforcement.Page 6 of 22 Module A is required to identify eligible participants from the population of interest

– individuals who are interested in buying a home in the next few months, are involved in their

household’s financial decision s, and who are not real estate professionals. Module A will measure these concepts in order to screen potential participants for eligibility. It will be

administered one

- time, and is therefore not expected to represent an undue burden. At the

conclusion of Module A, participants are presented with informed consent language and asked to

opt

- in to the remainder of the study.

Module B assesses participants’ stage of the home and mortgage search processes. It is used to identify which subsequent modules wi ll be administered (and skipped), and therefore is useful for minimizing participant burden. Additionally, it will provide information on the dynamics of participants’ information search, for instance, at what point in their home search they begin to

thin k about mortgage terms.

Module C assesses participants’ information search for home and mortgage information. It is necessary for measuring where participants are receiving information about mortgages (including the Owning a Home website )

.

Module D cont ains questions on participants’ empowerment, that is, their subjective ability to navigate the mortgage process and confidence in doing so. These questions will allow researchers to investigate whether the Owning a Home website increases empowerment, one of

the outcomes of interest.

Module E contains factual questions that measure knowledge of the mortgage process. These questions will allow researchers to investigate whether the Owning a Home website increases knowledge, one of the outcomes of interest. It will also be used to assess whether knowledge

increases during the proces s of searching for a home or mortgage. By collecting this information

from both the treatment and control groups, researchers can compare the relative improvement in knowledge (if any) between the groups.

Module F is designed to assess participants’ beli efs about the mortgage market, that is, the terms that they believe they will receive. By combining information from this module with information on respondents’ demographic and financial characteristics, the research team will be

able to assess whether b eliefs are reasonable , and whether they increase in accuracy over time.

Module G provides instructions to participants on how to send in their loan documents. Previous

research has shown that self

- reported mortgage information is often inaccurate

. 1 Specifically, in a study in which borrowers were asked to identify mortgage terms (using their loan documents), the percentage identifying a term correctly was sometimes as low as 5%. 2 Given that mortgage outcomes are one of the primary measures of inte rest, it is essential to collect accurate

1 Bucks, B., and Pence, K. (2008). Do borrowers know their mortgage terms? Journal of Urban Economics,

64 (2): 218

- 33.

2 Lacko, J. M., and Pappalardo, J. K. (2010). The failure and promise of mandated consumer mortgage disclosures: Evidence from qualitative interviews and a controlled experiment with mortgage borrowers. American Economic Review: Papers and P roceedings, 100 : 516

- 21.Page 7 of 22 information on mortgage terms. To reduce burden, p articipants will be given the opportunity to send in their documents directly through a method of their choice: uploading electronic files, mobile capture, or send ing a fax

. Any direct identifying information present on the documents will be redacted immediately, and the source documents will be destroyed as soon as practicable. If participants decline to send in their final mortgage documents, this module will as k a series of questions about their mortgage terms instead, allowing for a coarse estimate of mortgage terms.

In order to further reduce respondent burden, Module G will be administered only when participants report having received a new loan estimate or a fter closing.

Module H collects background information on respondents’ characteristics, including risk and time preferences, financial knowledge, and need for cognition. These characteristics will be helpful in subsequent analyses for assessing whether the Owning a Home tool is more effective for certain homebuyers. For instance, it may be the case that those with a high level of knowledge of financial concepts are more easily able to interpret the information that is provided

on the website. Module H will be administered one time to reduce burden on respondents.

Module I collects basic demographic and socio

- economic information including race/ethnicity, income, employment status, gender, and age, as well as financial information relevant to

mortgage search. Data from Module I will be used for two purposes: 1) to assess whether randomization has been conducted successfully and 2) to determine whether participants are receiving mortgages that are relatively expensive or inexpensive, given their backgro und

characteristics. Module I will be administered only once to reduce burden on respondents.

Module J consists of a reinforcing treatment language for both treatment groups, as well as a single open

- ended, optional question, where participants can repor t any additional thoughts or problems that they have with the survey. Data from Module J will be used to track any potential problems with the survey collection that should be addressed by the research team. As it is an optional question, it is expected to pose little burden to respondents.

3. Use of Information Technology

[Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g., permitting electronic submission of responses, and the basis for the decision for adopting this means of collection. Also describe any consideration of using information technology to reduce burden and specifically ho w this collection meets GPEA requirements. If the collection is not being considered for electronic delivery, you should provide a detailed justification of this decision.

Note: OMB must approve all internet forms prior to their implementation, including any new or revised instructions resulting from this effort. ]

This collection will be collected entirely or almost entirely using electronic submission technology. The survey component will be delivered electronically and responses will be

received elect ronically. The tracking of Owning a Home site usage will be completed entirelyPage 8 of 22 electronically.

For the mortgage document submission component, we intend to give respondents several options for submitting their documents. One option would be to scan (if n ecessary

– many consumers may receive mortgage documents electronically) and securely upload the documents. A second option would be mobile capture technology, in which consumers take pictures of their paper documents with their mobile phones. A third opti on could include consumers mailing or faxing a copy of their paper documents. We will evaluate the consumer demand for this third option during the Pilot Phase of the study.

There are several reasons why electronic delivery and submission are appropriate for this

collection. The Owning a Home project is itself an online set of tools and resources in its current

iteration

. Thus, our target audience for the Owning a Home project are prospective homebuyers with at least moderate competence in using modern int ernet technology. Our recruitment pool for the study will be drawn from the existing customer base of a major online home shopping

website. Therefore, individuals in the study population are well

- equipped to use an online survey

interface. Moreover, we ant icipate that given the respondent pool, respondents will likely prefer an online interface, and that conducting the study online will increase the response rate.

4. Efforts to Identify Duplication

[Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.

Duplication includes from other sources within the CFPB, from other Federal government sources, and from outside sour ces. If you are aware that information is collected elsewhere in the Federal government, the response should include a description of why it would be necessary to collect it from a member of the public again.]

The primary purpose of this collection is to identify (1) whether and how the Owning a Home project impacts consumers; (2) which consumer segments or profiles benefit the most from the Owning a Home project; and (3) the mechanisms by which the Owning a Home project impacts

consumer behavior and atti tudes. Because the Owning a Home project has been specifically developed by the CFPB as part of its consumer education and engagement mandate, no pre

existing sources of information relevant to these objectives exists.

Two additional purposes of this coll ection are to gain insight into: (4) general consumer behavior, attitudes, and approaches to obtaining a mortgage and mortgage shopping; and (5) the validity of certain hypotheses underlying the development of the Owning a Home project. While some existing research does exist on these topics, it is limited in scope.

One of the hypotheses used to develop the Owning a Home project is that additional mortgage shopping should allow consumers to obtain more favorable mortgage terms

. Previous research has expl ored the returns to shopping; however, th ere are two main limitations of this work in addressing this hypothesis . First, the majority of existing research concentrates on consumerPage 9 of 22 goods other than mortgages. 3 Given that shopping for a home and mortgage is a large, infrequently undertaken, and financially complex transaction, it is unclear whether results from other markets will generalize to mortgage outcomes. A second limitation of existing research is

that methodologically, it has been limited to theoretical and correlational analysis

. 4 Such research designs make it impossible to establish a causal relationship between shopping behavior and mortgage outcomes , because homebuyers ’ shopping behavior may be co rrelated with other unobservable characteristics. Analyses that do not induce variation in shopping behavior are unable to cleanly identify returns to shopping.

We have relied on this research in developing the approach to the Owning a Home project, but it is not an adequate substitute for the planned collection. We expect that the Owning a Home project will contribute two main sets of findings to existing research

. First, the project will provide estimates of the impact of Owning a Home and similar tools on mortgage outcomes

. A

randomized controlled trial , such as the one described here, is the best method for cleanly estimating the impact of financial education on mortgage outcomes from other individual

characteristics . Second, the pro ject w ill provide estimates of the returns to search in the mortgage market

. As discussed, this work will broaden existing research on consumer search using other consumer products and make methodological improvements in establishing the

causal effect of search on outcomes

.

5. Efforts to Minimize Burdens on Small Entities

[If the collection of information impacts small businesses or other small entities, describe any

methods used to minimize burden.

Out of the total number of respondents, you should give a percentage or estimated number of respondents that are small business in your response.]

The information will be collected from private citizens, not business entities.

6. Consequences of Less Frequent Collection and Obstacles to Burden Reduction

[Describe the consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently, as well as any technical or legal obstacles to reducing

burden.

3 See, for example, Griffith, R. et al. (2009). “ Consumer Shopping Behavior: How Much Do Consumers Save?” The Journal of Economic Perspectives , 23(2), pp. 99

- 120; Ratchford, B. and Srinivasan N. (1993). “An Empirical Investigation of Returns to Search.” Marketing Science, 12(1), pp. 73

- 87; Brown, J. and Goolsbee, A. (2000). “Does the Internet make Markets More Competitive? Evidence from the Life Insurance Industry.” NBER Working Paper 7996;

4 See, for example, Cook M. et al. (2002). “Losing Interest: How Much Can Consumers Save by Shopping Around for Financial Products?” Financial Services Authority Occasional Paper Series 19 and Woodward, S. and Hall, R. (2012). “Diagnosing Consumer Confusion and Sub

- Optimal Sh opping Effort: Theory and Mortgage

- Market

Evidence.” American Economic Review, 102(7), 3249

- 3279.Page 10 of 22 Address the impact on the CFPB’s mission if the informat ion is not collected or is conducted less frequently. This explanation may include justification such as an inability to deliver program benefits, or the timely implementation of a new program.]

This is a one

- time collection of information. If the information is not collected, the CFPB will be

unable to make evidence

- based decisions about how best to deliver on its consumer education and engagement mandate. In order to be certain that we are using the most effective approaches and investing o ur resources in the most effective places and ways, the CFPB needs to study the impact of its consumer education and engagement work , including the Owning a Home project

.

7. Circumstances Requiring Special Information Collection

[Explain any special circumstances that would cause an information collection to be conducted

in a manner:

• Requiring respondents to report information to the agency more often than quarterly;

• Requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it;

• Requiring respondents to submit more than an original and two copies of any document;

• Requiring respondents to retain records, other than health, medical, government

contract, grant

- in

- aid, or tax records, for mor e than three years;

• In connection with a statistical survey that is not designed to produce valid and reliable results that can be generalized to the universe of study;

• Requiring the use of a statistical data classification that has not been reviewed and

a pproved by OMB;

• That includes a pledge of confidentiality that is not supported by authority established in statute or regulation, that is not supported by disclosure and data security policies that are consistent with the pledge, or which unnecessarily im pedes sharing of data with other agencies for compatible confidential use; or

• Requiring respondents to submit proprietary trade secrets, or other confidential information, unless the agency can demonstrate that it has instituted procedures to protect the i nformation's confidentiality to the extent permitted by law.

If the answer to any of these bullets is “yes”, include a full explanation of those circumstances. If you feel that none of the bullets apply, you can use the following sample language: “There a re no special circumstances. The collection of information is conducted in a manner consistent with the guidelines in 5 CFR 1320. 5(d)(2).” ]

Participation in this study is entirely voluntary, and respondents can choose to cease their involvement at any time. Respondents will be asked to report information approximately every

two weeks, for a period of approximately three months. This frequency of survey was chosen soPage 11 of 22 as to ensure that we can capture the changes in consumers’ attitudes and behaviors over a relatively short mortgage shopping/acquisition window. A less frequent survey schedule would require respondents to recall how they felt or what actions they took over too long of a recall period. In behavioral surveys, the best practice is to survey re spondents frequently enough so that the period of recall is not too long to confound their memories. To minimize burden, the individual surveys will be kept short.

Respondents will be asked to respond to surveys within approximately five days of receipt. Again, the goal is to capture consumers’ attitudes and behavioral reports while the information is

still fresh in their mind. Moreover, given that respondents will be surveyed again two weeks later, the first survey must be answered in a timely fashion so as not to conflate results with the subsequent survey.

8. Consultation Outside the Agency

[If applicable, provide a copy and identify the date and page number of publication in the Federal Register of the agency's 60

- day notice, required by 5 CFR 1320.8(d), soliciting comments on the information collection prior to submission to OMB. Summarize public comments received in response to that notice and in response to the PRA statement associated with the collection over the past three years, and descri be actions taken by the agency in response to these comments. Specifically address comments received on cost and hour burden. Comments obtained from the

60

- day notice should be provided to OMB.

Describe efforts to consult with persons outside the agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, or reporting format (if any), and on the data elements to be recorded, disclosed, or reported.

Consultation with represe ntatives of those from whom information is to be obtained or those who must compile records should occur at least once every three years

— even if the collection of information activity is the same as in prior periods. There may be circumstances that may

p reclude consultation in a specific situation. These circumstances should be explained.]

In accordance with 5 CFR 1320.8(d)(1), the Bureau has published a notice Federal Register allowing the public 60 days to comment on this proposed new collection of inf ormation. Further and in accordance with 5 CFR 1320.5(a)(1)(iv), the Bureau will publish a notice in the Federal Register allowing the public 30 days to comment on the submission of this information collection request to the Office of Management and Budget

.

The CFPB has also consulted on the design of this survey with Mick Couper, a professor and survey design expert at the Population Studies Center at the University of Michigan. The CFPB will conduct a pilot test of the study in advance of the full stud y. Learnings from the pilot will be used to refine the survey and recruitment language, process, and incentive structure . This pilot

- phase study will be approved by the Office of Management and Budget under a separate generic PRA clearance.Page 12 of 22 9. Payments or Gifts to Respondents

[Explain any decision to provide any payment or gift to respondents, other than remuneration of

contractors or grantees. If such a decision is contemplated, include a justification for this action, description, monetary value of th e item.

If you do not plan to provide payments or gifts, a possible response would be: “No payments or gifts are provided to respondents.”]

Prospective homebuyers are a hard

- to

- find population

— only a small percentage of the population is actively intere sted in purchasing a new home at any given time. Additionally, searching for a home is a time

- consuming activity . We believe incentives are necessary to ensure an adequate response rate.

Based on similar research and consulting with survey experts, we bel ieve that an incentive of approximately $65

- 70 will be appropriate to attract sufficient response while minimizing cost to the government. Because the study requires multiple surveys over a period of time, the incentive will be delivered in multiple installments

— the precise incentive that a participant earns will depend on the completeness of their participation.

We plan to conduct a Pilot Phase study to test how best to allocate the survey budget between upfront and deferred payments . This is discussed more in question 14. Incentives will be

delivered via through PayPal and Amazon e

- giftcard

. Respondents will also have the option to

choo se to receive a reusable gift card.

Participants will be able to complete all survey activities at home or in the location of their choice, thus there are no expected travel costs. The surveys have been tested to minimize time burden; additional details are provided below in Section 12.

10. Assurances of Confidentiality

[Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or agency policy.

If the CFPB has unique confidentiality policies or other privacy policies apply, they should be cited and discussed in terms of what protections will be provided to respondents.]

The Bureau will not disclose any personally identifiable information collected except to the extent that it is requ ired to do so by law and as provided in the Privacy Act Statement listed

below. Additionally, the Bureau will treat the information collected consistent with its confidentiality regulations at 12 C.F.R. Part 1070, et seq.Page 13 of 22 The information contemplated here is covered under two separate Privacy Impact Assessments (PIA). The Consumer Experience Research PIA is available at http://files.consumerfinance.gov/f/201 406_cfpb_consumer

- experience

- research_pia.pdf , while the forthcoming Consumer Education PIA will be published on consumerfinance.gov/privacy prior to the start of the pilot. Additionally, information contemplated here is subject to the Privacy Act of 1974 and is covered under the Bureau’s existing Consumer Education and Engagement Records System of Records Notice, 77 FR60382.

11. Justification for Sensitive Questions

[Provide additional justification for any questions of a sensitive nature, such as sexual behavior and attitudes, religious beliefs, race/ethnicity, disability, social security numbers, and other matters that are commonly considered private. This justification should include the reasons why the agency considers the questions necessary, t he specific uses to be made of the information, the explanation to be given to persons from whom the information is requested, and any steps to be

taken to obtain their consent.

For information collections involving questions of race/ethnicity, you should ensure that the OMB standards for Classification of Federal Data on Race and Ethnicity (Federal Register, October 30, 1997, Volume 62, Number 210, pages 58781

- 59790) are followed.

If this question does not apply, a possible response would be: “This info rmation collection does not include questions of a sensitive nature.”]

Respondents will be asked to provide basic demographic and socio

- economic information including their race/ethnicity, employment status, gender, and age. This information is necessar y to determine whether a socio

- demographically diverse data set has been collected. Additionally, it is necessary to determine that the randomization process was correctly executed and that the treatment and control groups are similar with regard to known factors.

Respondents will also be asked to provide financial information relevant to their home and mortgage search, including an estimated purchase price, income level, liquid assets available

, and perceived credit score. This information is necessary to determine whether respondents are receiving a relatively expensive or inexpensive mortgage, as mortgage rates are partially determined by purchase price, a borrower ’s creditworthiness (credit score, income), and potential down payment (liquid assets).

Finally, respondents will be asked to provide mortgage loan documents. Previous research has demonstrated that borrowers may not be aware of all of their mortgage terms; therefore, it is

necessary to see loan documents directly. Improvement in mortgage terms is one of the main

measures of interest.

Before providing any personally identifiable or otherwise sensitive information, participants will be given informed consent documents. Such documents will give researchers permission toPage 14 of 22 collect and analyze demographic and financial information throughout the study. Additionally, during survey collection, r espondents may refuse to answer any question or participate in additional survey activity, including providing mortgage documents

.

12. Estimated Burden o f Information Collection

[Provide estimates of the hour burden of the collection of information. The statement should:

• Indicate the number of respondents, frequency of response, annual hour burden, and an explanation of how the burden was estimated. Unle ss directed to do so, agencies should not conduct special surveys to obtain information on which to base hour burden

estimates. Consultation with a sample (fewer than 10) of potential respondents is

desirable. If the hour burden on respondents is expected to vary widely because of differences in activity, size, or complexity, show the range of estimated hour burden, and explain the reasons for the variance. Generally, estimates should not include burden hours for customary and usual business practices.

• If this request for approval covers more than one form, provide separate hour burden estimates for each form and aggregate the hour burdens.

• Provide estimates of annualized cost to respondents for the hour burdens for collections of information, identifying a nd using appropriate wage rate categories. The cost of contracting out or paying outside parties for information collection activities should not

be included here.

This response should be detailed enough for the reader to understand how you developed the burden estimates (e.g., sources of data, changes in program requirements). It is not necessary to indicate collection instrument by collection instrument how the estimated response was derived; however, a general statement on how those numbers were develop ed is necessary.

Whenever there is more than one source of burden (e.g., multiple forms, surveys, or recordkeeping requirements), you should use a burden table or spreadsheet in Excel to show the burden estimate for each collection requirement.

Note: a r espondent is counted only ONCE though he or she may complete multiple documents. Therefore, the number of respondents affected by the collection should not necessarily equal the sum of the number of the respondent’s column. The number of respondents is the actual number of individuals the collection is estimated to impact in a given year.

In developing burden estimates, you should take into account the following considerations:

• In complex collections, you may need to calculate the burden estimate separately for different categories of respondents. A single grid can be used for this, but some narrative should be provided to describe the burden estimation approach used for each group of respondents.

• The burden estimate may need to account for differ ent methods of collecting the samePage 15 of 22 information. For example, if a form previously (and currently) available in hard copy format is now available on the Internet and the capability also exists to submit the information to the agency electronically, then sep arate burden calculations for submission of the same information should be included to reflect the different time requirements

associated with each method of collection. This can also be included, with proper notations in the description column, in the sam e table or grid, as long as a detailed narrative explaining the duplication is provided in the response.

• If you do not offer other methods for reporting required information other than physically visiting a field or headquarters office, then you must inclu de round trip travel time in the

burden estimate. If multiple collection options are offered, then travel time should be calculated for only the percentage of responses that you feels will result from a physical

visit to an office.

With respect to annuali zed costs to respondents for the hour burdens for collections of information, the estimate of annualized cost is a theoretical cost accounting for the idea that the respondent’s time spent complying with the information collection request is worth somethin g

- i.e., time is money. The total burden hours should be multiplied against an average hourly wage rate for the respondent universe.

Minimum wage may be used, but only if that wage is reasonable for the class of respondent

affected. An explanation of the wage rate used should be provided and the source, if applicable,

cited. If multiple respondent groups exist, then the burden hours for each group should be factored against an appropriate hourly wage rate and summed. Note : This information can be

found at Dept. of Labor, Bureau of Statistics website. The most c urrent BLS data is available at : http://www.bls.gov/news.release/pdf/ocwage.pdf

. ]

The calculation of burden is complex, as attrition over the course of this longitudinal study results in a diminishing number of participants at each stage. The below table includes estimates

of attrition and a detailed calculation of burden hours for each t ask. The per

- task burden estimates were developed using a small (less than 9) sample of instrument pre

- testers. The total

burden is estimated at 9,661 hours.Page 16 of 22 13. Estimated Total Annual Cost Burden to Respondents or Recordkeepers

[Provide an estimate of the total annual non

- hour cost burden to respondents or recordkeepers resulting from the collection of information. (Do not include the cost of any hour burden already reflected in item 12.)

• The cost estimate should be split into two components:

o (a) a total capital and start

- up cost component (annualized over its expected useful life) and

o (b) a total operation and maintenance and purchase of services component. The

estimates should take into account costs associated with generating, maintaining, and disclosing or providing the information (including filing fees paid for form processing). Include descriptions of methods used to estimate major cost factors Line # Component Retention # Participants Sample/attrition

calculation notes Time/

person (mins) Burden

Hours Burden calculation notes

1 Arrive at Study Home Page 50,000

2 Screener (Module A) 0.95 47,500 Nearly all those who arrive in will

at least take the screener 3 2375

3 -- Eligibility criteria: plan to offer w/in 3 mos 0.67 31,825

4 -- not employed by mortgage industry 0.95 30,234

5 -- financial decisionmaker 0.95 28,722

6 Opt-in to study 0.5 14,361 50% of those completing screener

will agree to participate

7 Baseline Survey (Module B-F; H-J) 0.9 12,925 those eligible & opted-in who

start the baseline uses average of start and finish

participant numbers

8 0.75 9,694 those who complete once started
(long survey - lower completion

rate) 22 4147

9 Periodic Survey #1 (Module B, C, D, J) 0.8 7,755 those who start periodic surveys

10 0.95 7,367 short survey; higher completion 6 756 uses average of start and finish

ii b 11 Periodic Survey #2 (Module B, C, D, J) 0.9 6,630

12 -- rejoiner rate (those who miss survey #1) 0.05 485

13 -- completion rate 0.95 6,759 short survey; higher completion 6 462 uses average of start and finish

14 Periodic Survey #3 (Module B, C, D, J) 0.85 5,745

15 -- rejoiner rate (those who miss survey #2) 0.04 295

16 -- Start, don't complete 0.1 604 6 30 applies a 0.5 factor to burden time

to account for drop outs

17 -- Complete 0.8 4,832 later survey; lower completion

rate 6 483

18 -- Closed, jump to exit survey 0.1 604 see "early closers" below

19 Periodic Survey #4 (Module B-G, J) 0.75 3,624 calculated from # that finish

survey 3 -- later stage, attrition

likely permanent

20 -- Start, don't complete 0.1 362 18 54 applies a 0.5 factor to burden time

to account for drop outs

21 -- Complete 0.75 2,718 18 815

22 -- Closed, jump to exit survey 0.15 544 see "early closers" below

23 GFE document collection (Module G) 0.5 1,359 calculated from # that finish

survey 4 4 91 not all participants will have docs

24 Final Survey - Late closers (Module B, C, F, J) 0.7 1,903 starting survey - calculated from #

finishing survey 4

25 0.8 1,522 completing survey 8 228

26 Final Survey - Early closers (Module B, C, F, J) 1,148 early closers 100% start rate, non complete

accounted for in earlier surveys

27 0.8 918 completing survey 8 138

28 Final document collection (Module G) 0.5 1,220 of those completing final survey 4 81

28 Total 109 9,661Page 17 of 22 including system and technology acquis ition, expected useful life of capital equipment, the discount rate(s), and the time period over which costs will be

incurred. Capital and start

- up costs include, among other items, preparations for collecting information such as purchasing computers and s oftware; monitoring, sampling, drilling and testing equipment; and record storage facilities.

• If cost estimates are expected to vary widely, agencies should present ranges of cost burdens and explain the reasons for the variance. The cost of purchasing or contracting out information collection services should be a part of this cost burden estimate. In developing cost burden estimates, agencies may consult with a sample of respondents (fewer than 10), utilize the 60

- day pre

- OMB submission public comment proc ess and use existing economic or regulatory impact analysis associated with the rulemaking containing the information collection, as appropriate.

• Generally, estimates should not include purchases of equipment or services, or portions thereof, made: (1) pri or to October 1, 1995, (2) to achieve regulatory compliance with requirements not associated with the information collection, (3) for reasons other than to provide information or keep records for the government, or (4) as part of customary and

usual busine ss or private practices.

This question and its response should address the ACTUAL cost a respondent must bear as a

result of the information collection. In most situations, this will be zero; however, the agency should consider all aspects of the informat ion collection to determine if any equipment, software, or services must be procured by the respondent in order to provide the agency with the information requested.

If you do not feel there are any costs of this nature, the following response may be used: “There are no capital/start

- up or ongoing operation/maintenance costs associated with this information collection.”]

There are no capital/start

- up or ongoing operation/maintenance costs associated with this

information collection.

14. Estimated Cos t to the Federal Governme nt

[Provide estimates of annualized cost to the Federal government. Also, provide a description of the method used to estimate cost, which should include quantification of hours, operational expenses (such as equipment, overhead, printing, and support staff), and any other expense that

would not have been incurred without this collection of information.

The response should include the ACTUAL costs the CFPB will incur as a result of implementing

this information collection. The est imate should include costs, if applicable, for:

• Employee labor and materials for developing, printing, storing forms (formula to use re: printing

- .0473 per page (i.e., a 10 page form would cost .473 x number of copies printed, whether it be printed by the plant or Xeroxed);

• Employee labor and materials for developing computer systems, screens, or reports toPage 18 of 22 support the collection;

• Employee travel costs;

• Cost of contractor services or other reimbursements to individuals or organizations assisting in t he collection of information;

• Employee labor and materials for collecting the information; and

• Employee (programs) labor and materials for analyzing, evaluating, summarizing, and/or reporting on the collected information.

Consider summarizing this information in a table or grid. When costs for employee time are being described, a separate table or grid entry should be noted for each different grade/step category invol ved in the collection activity.

If there are no costs: “There are no additional co sts to the Federal Government.” ]

The costs to the Government to conduct this collection consist of a firm

- fixed price contract for survey administration support and data matching, and the incentives paid to participants.

Category Method of computation Cost Contractor support Firm fixed

- price contract $ 246,05 8 Incentives to respondents See below. $ 189,465

Total cost to the Government: $435,523

Incentives to Respondents

The calculation of the total cost of incentives is complex, as attrition over the course of this longitudinal study results in a diminishing number of participants at each stage. The below table

includes estimates of attrition and incentive costs for each st age of the study. In the pilot phase of this study, we will test variations to the incentive structure to refine our approach and

minimize costs to the Government.Page 19 of 22 15. Program Changes or Adjustments Line # Component Retention # Participants Incentive Total $

1 Arrive at Study Home Page 50,000

2 Screener (Module A) 0.95 47,500

3 -- Eligibility criteria: plan to offer w/in 3 mos 0.67 31,825

4 -- not employed by mortgage industry 0.95 30,234

5 -- financial decisionmaker 0.95 28,722

6 Opt-in to study 0.5 14,361

7 Baseline Survey (Module B-F; H-J) 0.9 12,925

8 0.75 9,694 $5 $48,470

9 Periodic Survey #1 (Module B, C, D, J) 0.8 7,755

10 0.95 7,367

11 Periodic Survey #2 (Module B, C, D, J) 0.9 6,630

12 -- rejoiner rate (those who miss survey #1) 0.05 485

13 -- completion rate 0.95 6,759

14 Periodic Survey #3 (Module B, C, D, J) 0.85 5,745

15 -- rejoiner rate (those who miss survey #2) 0.04 295

16 -- Start, don't complete 0.1 604

17 -- Complete 0.8 4,832

18 -- Closed, jump to exit survey 0.1 604

19 Periodic Survey #4 (Module B-G, J) 0.75 3,624

20 -- Start, don't complete 0.1 362

21 -- Complete 0.75 2,718

22 -- Closed, jump to exit survey 0.15 544

23 GFE document collection (Module G) 0.5 1,359 $5 $6,795

24 Final Survey - Late closers (Module B, C, F, J) 0.7 1,903

25 0.8 1,522 $50 $76,100

26 Final Survey - Early closers (Module B, C, F, J) 1,148

27 0.8 918 $50 $45,900

28 Final document collection (Module G) 0.5 1,220 $10 $12,200

28 Total $70 $189,465Page 20 of 22 [Explain the reasons for any program changes or adjustments in hour or cost burden.

This response should address any changes from the previous approval of the collection. If no changes have been made then the following statement would be appropriate: “There are no changes to the information collecti on since the last OMB approval.”

If there are changes, your response should be detailed enough for the reader to track the requests for changes from the previously approved burden amount to the current burden request. Program changes include: changes tha t were implemented proactively by the CFPB (e.g., a regulatory change which eliminated or added reporting/recordkeeping requirements; a change in frequency of collection; a change in the method of collection) regardless of whether or not the changes

were d irected by legislation. Adjustments include: changes due to things not necessarily in the CFPB’s control (e.g., a change in the number of respondents, a change in program funding levels) or changes in the burden estimation approach (e.g., addition of a for m currently in use, but not previously approved; a change in a burden estimate, changes due to previous miscalculations in the burden estimate). If a new collection, enter “This is a new information collection request; therefore, all the burden (see Item 1 2) is considered a program change”]

This is a new information collection. There is no prior OMB approval.

16. Plans for Tabulation, Statistical Analysis, and Publication

[For collections of information whose results will be published, outline plans for tabulation and publication. Address any complex analytical techniques that will be used. Provide the time schedule for the entire project, including beginning and ending dates of the collection of information, completion of report, publication dates, and o ther actions. Also indicat e whether the information would be distributed internally or externally.]

Information from participants at baseline will be used to evaluate the quality of the randomization process. Specifically, if assignment to treatment and control groups has occurred randomly, then there should be no statistically distinguishable differences between the treatment and control groups with regard to descriptive characteristics. The initial survey will include information on basic demographic a nd socio

- economic characteristics, information sources used thus far in the mortgage search, and knowledge of and attitudes toward the mortgage process.

The primary analytic technique for estimating the impact of the Owning a Home suite of tools is

a comp arison of the outcomes for participants who were given access to these tools (the treatment group) to those who were not given access (the control group). The research team intends to use “intent to treat” analysis, thereby estimating effects on those who had the opportunity to receive treatment, including those who did and did not use the tools. Assuming that the randomization process is performed correctly, this analysis identifies the causal impact of access to the Owning a Home suite of tools on mortg age outcomes for the study population

.

Estimates of the differences between the two groups will be calculated using data from surveys, online tracking, and mortgage outcomes. For each difference, statistical confidence intervalsPage 21 of 22 will be calculated using standard statistical assumptions.

For some outcomes, the research team is additionally interested in how outcomes changed during the home shopping process. For example, it may be expected that respondents who have completed their home purchase and have c losed on a mortgage will have higher knowledge of the mortgage process than those who are in the initial stages of their home search. As such, changes in mortgage knowledge between baseline and the final survey will be compared for

those in treatment and control groups.

In addition to variation that is imposed on the groups from random assignment, there will be variation on an individual basis. The research team is interested in whether the Owning a Home

suite of tools is more effective for individuals with particular characteristics, such as higher financial literacy. Thus, within the treatment group, outcomes will be compared for respondents with differing baseline characteristics.

Finally, it is worthwhile to know whether shopping behavior itself im proves mortgage outcomes

, and some academic research has investigated this question

. 5 It is expected that participants in the treatment group may engage in more shopping behavior than those in the control group . In order to isolate the effect of shopping , researchers will employ what is known as a “two stage least squares” approach. This technique will statistically isolate the effect of shopping on mortgage outcomes, allowing researchers to estimate the benefits from shopping.

The research team will an alyze, integrate, and summarize data and findings from the research in a report, which will be made publicly available.

Tentative Timetable

Information collected April

– July 2015

Data a nalysis August 2015

– March 2016 Writing of report March 2016

– September 2016 Publication of aggregate report Approximately December 2016

17. Display of Expiration Date

[If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

If the agency plans to print the expiration date of OMB approval on all forms/surveys/ questionnaires, then the following statement would be appropriate: “The Bureau plans to display the expiration date for OMB approval of the information collection on all instruments.”]

The Bureau plans to display the expiration date for OMB approval of the information collection

on all instruments. Further, the OMB control number and expiration date will be displayed on the Federal government’s electroni c PRA docket at www.reginfo.gov

.

5 Woodward, S. E., and Hall, R. E. (2010). Consumer confusion in the mortgage market: Evidence of less than a perfectly transparent and competitive market. A merican Economic Review: Papers & Proceedings, 100 : 511

- 15.Page 22 of 22 18. Exceptions to the Certification Requirement

[Explain each exception to the topics of the certification statement identified in "Certification for Paperwork Reduction Act Submissions." If there are exceptions, a detailed justification of each should be provided. 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8(b)(3), The

certification is to be made with reference to tho se regulatory provisions and include the

follow ing items: (a) It is necessary for the proper performance of agency functions; (b) It avoids unnecessary duplication; (c) It reduces burden on small entities; (d) It uses plain, coherent, and unambiguous terminology that is understandable to respondents ; (e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices; (f) It indicates the retention period for recordkeeping requirements; (g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3): (i)Why the information is being collected; (ii) Use of information; (iii) Burden estimate; (iv) Nature of response (voluntary, required for a benefit, or mandatory); (v) Nature and extent of confidentiality; and (vi) Need to display currently valid OMB control number; (h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected (see note in Item 19 of the instructions) (i) It uses effective and efficient statistical survey methodology; and (j) It makes appropriate use of information technology.

If no exemption is being sought, enter “The Bureau certifies the this collection of information is consistent with the requirements of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8(b)(3) and is not seeking an to these certificastion requirement s.”

Note: Generally, the Bureau’s PRA Officer does not sign information collection request seeking an exemption to
the PRA certification requirements un less a robust and defensible justification for such an exemption is provided. ]

The Bureau certifies the this collection of information is consistent with the requirements of 5 CFR 1320.9, and the related provisions of 5 CFR 1320.8(b)(3) and is not seeking an to these

certifica tion requirements