The newly formed Consumer Financial Protection Bureau (CFPB), one of the newest agencies under the Federal Government, created “to make markets for consumer financial products and services work for Americans”. Hmm, sounds good, but as usual, I was skeptical. However, thus far, I’m pretty impressed with the CFPB’s approach to changing mortgage disclosure statements in an effort to make it easier for consumers to understand the terms of the home mortgage they have been offered as well as to shop “apples to apples” for the best home mortgage.
Simplifying and clarifying mortgage disclosures:
Presently, when you apply for a home mortgage, lenders are required to provide you with two disclosures that contain basic terms and information about your mortgage via a Truth in Lending Form and a Good Faith Estimate. Unfortunatley unless you have a Masters Degree in real estate finance you may find it difficult to understand all the data in these forms and I doubt many people even attempt to read and decipher both forms in their entirety. The CFPB is planning to replace these two cumbersome documents with one, easy to read and easy to understand disclosure document that will make it easier for borrowers to know the important terms of the loan they are applying for, as well as make it easier to compare loans among various lenders.
The CFPB is “taking it to the streets”:
I have to applaud the CFPB for this one! Instead of a bunch of bureaucrats sitting around a room in D.C. and figuring out what they “think” is best for a normal consumer (something that none of them probably are) they are actually asking the consumer what they think is best! The CFPB has produced two new sample disclosure documents (both of which I think are great and vast improvements over the old forms) and are asking consumers to tell them which one they like best. You can view the new disclosures by clicking on the link below, then there are additional links if you care to go to the CFPB site and tell them which form you think is best.
To tell the CFPB which form you think is best by clicking here.
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