The Consumer Financial Protection Bureau (CFPB) is proposing “Know Before You Owe” mortgage forms that would be simpler and easier for consumers to use when obtaining a mortgage. Buyers currently receive two different but overlapping federal disclosure forms that outline the terms and costs of a mortgage but CFPB is streamlining them into one document.
In a news release, CFPB Director Richard Cordray said:
“When making what is likely the biggest purchase of their life, consumers should be looking at paperwork that clearly lays out the terms of the deal. Our proposed redesign of the federal mortgage forms provides much-needed transparency in the mortgage market and gives consumers greater power over the exciting and daunting process of buying a home.”
Read the full release for details on the proposed changes, but some of the key improvements being proposed include:
- Simpler than the old forms
- Highlight information consumers need
- Easier to look out for risks
- More time to consider choices
- Limits on closing cost increases
CFPB is seeking public comment on the proposal. Click here to submit a comment. The public has until Nov. 6, 2012, to review and provide comments on most of this proposal. However, comments are due for specific portions on Sept. 7, 2012.
CFPB is also proposing a rule that expands protections for “high-cost” mortgage loans. Public comment is also sought on that proposal and will be accepted until Sept. 7, 2012.