Coming Soon: A Shorter, Clearer Mortgage Form
How much are you borrowing and how much will it cost to pay it back? Those are the key questions that a mortgage disclosure form should answer, and the Consumer Financial Protection Bureau is trying to develop one that will will give it to consumers straight.
The agency is circulating two different versions of a proposed form on a new “Know Before You Owe” website and asking consumers to vote on which one they like better. The agency intends to propose a new federally required form shortly after it officially launches on July 21, 2011.
That two-page form would replace both the Truth in Lending disclosures and the Good Faith Estimates that now bury borrowers in near-inscrutable paperwork. The new forms both include key terms, closing costs, projected payments and warnings of traps for consumers. The agency still hasn’t addressed the issue of when the disclosure form would have to be sent to borrowers, though Elizabeth Warren, the consumer advocate who’s been setting up the agency, has complained publicly that consumers get these disclosures too late in the borrowing process.