Industry pleased with new mortgage disclosure form
Inman news | 2013-12-01 20:29

Real estate and mortgage lending industry leaders are largely positive about new mortgage disclosure forms released today by the federal government’s consumer watchdog — and it doesn’t hurt that they won’t be required to use the new forms for nearly two years.

The Consumer Financial Protection Bureau released a final rule requiring the use of new, simplified mortgage disclosure forms that are designed to make it easier for homebuyers to understand the terms of a mortgage, compare loan offers, and avoid “costly surprises” at closing.

The two ”Know Before You Owe” forms will replace four current disclosure forms that lenders, industry groups and consumer groups alike have complained contain overlapping information and are confusing to consumers.

“Taking out a mortgage is one of the biggest financial decisions a consumer will ever make,” said CFPB Director Richard Cordray in a statement.

“Today’s rule is an important step toward the consumer having greater control over the mortgage loan process.”

Homebuyers currently get two disclosure forms whenever they apply for a mortgage, and two more at the closing table. Loan applicants get one loan disclosure form aimed at satisfying Truth in Lending Act requirements (the “TILA” form), detailing loan terms like annual percentage rate (APR).
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