1,099-page rule seeks to simplify mortgage forms
The Consumer Financial Protection Bureau has proposed new disclosures to be given to borrowers after they apply for loans and three days before closing.
The Consumer Financial Protection Bureau has come up with new mortgage-disclosure forms and hopes they will provide consumers with better information before they take out a home loan.
But the challenge of making these complex issues simple is reflected in the size of the proposed rule: It's 1,099 pages.
"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," said Richard Cordray, CFPB director, in a news release. "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."
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One of the forms would go to borrowers within three business days after they apply for a loan. It would replace two forms mandated by different laws and that consumer advocates say are confusing.
The second form would go to consumers three business days before closing. This would replace two documents, the HUD-1 Settlement Statement and a required truth-in-lending disclosure, that are usually among a big stack of documents presented to homebuyers at closing. The size of this stack can make it difficult to object to charges or correct errors.
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You can compare the proposed forms with the old ones here.
In general, consumer advocates praised the new forms, while industry officials raised some questions.
The bureau is taking comments until November on the proposed rule (September for some portions) before issuing final regulations. The bureau is also proposing a new rule for disclosure on high-cost mortgages.
The New York Times "Bucks Blog" noted a report from Kleimann Communication Group, which helped the bureau design the forms, about the difficulty of providing "plain and simple" disclosures to consumers with widely differing levels of education about the homebuying process. Kleimann wrote:
Nothing is plain or simple about the consumers who will use these disclosures. In truth, consumers, like all of us, are widely different, frustratingly indifferent to some information, naïvely trusting at times, frequently unaware of risks and often willing to ignore anything that seems overly complex.
What do you think about the new forms? Are they clear enough?
Why change any thing with the paper work, The people getting the mortgage (mortgagor) cant read anyway. All they think about is the monthly payment and the house. The moving van is in the street and what do you do?
YOu need to get rid of the crooked banks and investors that end up with these loans. They screw up and tax payers pay their bills. Prices are inflated and to many fingers in the pie, from local loan brokers to wall street Its all about money, how much can we screw the consumer. Have one set rate like 2 or 3 % and let the rats fight over it.
This was Obama's first blow to the American people the financial collapse of the housing market. And he first used Acorn, Chris Dodd and Bernie Frank to do his bidding for him. Then Chris Dodd and Bernie Frank to get Freddie Mac and Fannie Mae with the Banks to give out loans that people didn't qualify for. Lets see what was the line of BS they said !! "Every American Family should live the American Dream and own a Home" Off to the house race we went... Obama sat back and played us for fools And here he is doing it again!!! But this time Obama is not behind the scene. This time he is front and center putting the screws to America. Printing money we are so far in debt we will never never see the light of day. Trillions can you wrap your mind around that trillions of dollars in debt. We will never pay that back does Obama care HELL NO!!! He is to busy giving our money away to Cuba, Muslims, Kenya and Palestine. Print up the money and give it away don't do anything for America with the money. We still have a high Employment rate. Still have families losing their homes. People going hungry at night. But Obama is to busy giving our money away!!! Obama and Sores want nothing but to DESTROY America. That has been Obama main goal from the start of his Political Career. Anti - American and Anti - White. He doesn't have connections with The Black Panthers, Farrakhan, Rashid Khalidi and didn't spend twenty years in Jeremiah Wrights Church for nothing. Obama has a big middle east connection if we dig hard enough we could link Obama to 911 !!!! And I know one thing for sure Obama didn't hunt Osama Bin Laden down he was handed over to Obama on A silver platter by Rashid Khalidi. Please People take a look at the man behind the CURTAIN!!!! Vote this SOCIALIST ANTI - American out of our White House don't let this conartistes run a game on us. Let put this conartistes out of BUSINESS !!!
I bought my last home in 1990.
With the truth in Lending Laws the information is ALL there.
All you have to do is READ.
I only have a 12 grade education.
All you have to do is READ.
Just another excuse to spend money by Our Government.
WebMaster - we should talk. You can use premium pricing for a lender credit to absorb those costs, rather than rolling them in. Why would your lender willingly move you to a lower rate?
I am known as "FIXMYLOAN" a former moderator on LenderImplode. I would be glad to speak to you on this - NMLS # 691145
The basic forms are fine, unfortunately the govt already requires an extra 30 pages just for the application. "helping people out"
How is it possible I'm better off continuing paying my 30 year mortgage at 7% with 13+ years remaining than it is getting into a 15 year mtg at 2.8x%?
Simple: Closing costs.
I wanted to re-fi several months ago, back when the rate was 3.39% or so. So I called my mortgage holder and they told me I was $$s ahead continuing making payments at 7%.
So I asked them why? They told me closing costs were 9K+.
I was floored! Nine thousand for a few hours worth of paperwork?!! Where do I sign up?!
I was of the belief that among other things those who crashed the housing market to begin with were supposed to be being held accountable and doing their share towards helping keep folks in their homes.
Well how in the world is it at all fair that closing costs are nearly twice as much today as they were approx 20 years ago??
This is not at all right for the homeowner! Great gig for those on the other side of the table though.
Basically it's just more free money for those who helped create the housing mess.
If the Gov't really wants to help people stay in their homes, knock the closing costs down to what it actually costs plus a fair profit. I'm sorry, but nine grand for a few hours of pushing paperwork around is a totally unacceptable gifting.
The mortgage catastrophe occurred when Chris Dodd, Barnie Frank and Obama led an effort to promise huge bonuses to the CEO s of Fannie Mae and Freddie Mac in return for the CEO s to make it policy to approve mortgage loans to individuals who did not qualify for mortgage loans by any standard. Obama, also, promised the CEO s jobs in the administration if they were forced to resign from their posts. In return, the CEO s paid huge contributions into Obama's campaign and the political funds of the other two. The 2nd big pay off for Obama was that the democrats perceived guaranteed votes from those that were authorized the bad loans.
This is what caused the biggest financial collapse in the US since the depression. And, boys and girls, we are not out of it yet. Furthermore, it will get worse if Obama and his incompetent appointments get four more years.
About Teresa Mears
Teresa Mears is a veteran journalist who has been interested in houses since her father took her to tax auctions to carry the cash at age 10. A former editor of The Miami Herald's Home & Design section, she lives in South Florida where, in addition to writing about real estate, she publishes Miami on the Cheap to help her neighbors adjust to the loss of 60% of their property value.