Simpler mortgage disclosure forms may be here soon

One of the provisions of the 1975 Home Mortgage Disclosure Act is that loan providers must clearly delineate all pertinent aspects of public loan data. This and other legislation has been around for over 30 years to aid customers, but the subprime mortgage crisis indicates the U.S. nevertheless has a long way to go before being user-friendly. Thus, the Consumer Financial Protection Bureau plans to take steps to simplify mortgage disclosure forms so that any prospective homebuyer can understand them. Source for this article – CFPB to make simpler mortgage disclosure forms a priority by MoneyBlogNewz.

The ‘key priority’ mortgage disclosure form

Part of the Dodd-Frank act was the CFPB that begins on July 21 officially. A “key priority” in it is the new mortgage disclosure form, says the Wall Street Journal.

Mortgage forms currently consist of copious amounts of paper documenting all aspects of the mortgage agreement in Byzantine detail. Borrowing costs and other fees linked to the closing of the loan are buried in a sea of provisions. These book-like forms were created under the auspices of 1968’s Truth in Lending Act and the Real Estate Settlement Procedures Act of 1974. Mortgage disclosure forms will become friendlier than ever if the CFPB gets what it wants.

“We will be looking at our first (mortgage form) prototypes,” White House adviser and possible CFPB chairwoman Elizabeth Warren told Dow Jones Newswires.

Housing industry has opposed simpler forms before

The CFPB idea to simplify the forms was being reviewed by Warren with supports. However, various members of Congress and the housing industry have opposed similar attempts in the past to improve the readability of mortgage papers so that customers can understand the exact costs associated with their mortgage loans. The CFPB post may be filled by someone who might make an effort to help Warren. What the decision is on changes to the charge card industry will be determined in the future.

Information from

Home Mortgage Disclosure Act

ffiec.gov/hmda/

Wall Street Journal

blogs.wsj.com/developments/2011/04/18/warren-new-prototype-for-mortgage-forms-coming-in-may/?mod=google_news_blog

You should understand your mortgage

youtube.com/watch?v=MC515DJrhsM