New Consumer Bureau Unveils Model Mortgage Forms
General mortgage information would be on the first page and more specific details about the mortgage costs would appear on the second, according to prototypes of mortgage disclosure forms that the new Consumer Financial Protection Bureau unveiled Wednesday.
The first page has information in the loan amount, taxes, down payments and tools to compare the loan to others. The second page contains a detailed loan estimate with an estimate of what the consumer would pay at closing.
“It’s always good for consumers to understand the true costs,’’ said Elizabeth Warren, who is setting up the new bureau, during a conference call with reporters. “Consumers will be able to answer the questions ‘Can I afford this mortgage? Can I get a better deal somewhere else?’’’
The bureau has set up two sample forms, which contain the same information though with different layouts, and will test them during interviews with lenders, brokers and consumers in six cities before coming up with a final form that it plans to send out for comment in July 2012.
Interviews will be conducted in six cities: Albuquerque, Baltimore, Birmingham, Chicago, Los Angeles and Springfield, Mass.
The form will combine the disclosures required in the two previous forms that were required under the Truth in Lending Act and the Real Estate Settlement Procedures Act.
The financial overhaul bill passed last year, which created the bureau, also mandated that the new bureau consolidate the forms. CUNA and NAFCU were among the groups that had urged the consolidation. Both groups were briefed on the new forms Tuesday.
The bureau is an independent agency that will be housed in the Federal Reserve and is scheduled to begin operation in July.