Mortgage Form Paperwork Cut in Half by CFPB
NEW YORK (TheStreet) -- So-called "easier-to-use" mortgage forms are ready for prime time, as the Consumer Financial Protection Bureau has finalized rules making home purchase paperwork more user-friendly.
The Wednesday announcement focuses on the agency's "Know Before You Owe" program, which educates mortgage consumers on payment options and fees or charges they may accumulate in the home purchase process.
"Taking out a mortgage is one of the biggest financial decisions a consumer will ever make," CFPB Director Richard Cordray says. The new forms "improve consumer understanding, aid comparison shopping and help prevent closing table surprises for consumers."
"Today's rule is an important step toward the consumer having greater control over the mortgage loan process," he says.The new form, stemming from language in the 2010 Dodd-Frank financial reform bill that mandated simpler consumer financial documents, takes aim at a 30-year law that says mortgage lenders, upon getting a mortgage application, must provide two disclosures to potential homebuyers. When the home purchase deal is closed, another pair of forms must be sent, further complicating the paperwork. Now consumers will only have two disclosure documents: one at the front of the deal (three days after completing a mortgage loan application) and one at the back (three days before a homebuyer closes on a new home).
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