TopMortgage Compliance Update (1)

October 19, 2011


CFPB: Issues Mortgage Disclosure Update

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The CFPB has issued its fourth update to the Mortgage Disclosure form. This is the fourth time since May 2011 that the CFPB has issued an update to the form and requested comments.

To date, the CFPB has received more than 24,000 comments, as part of its Know Before You Owe, the review program that commenced in May 2011. The CFPB website, activated on February 3, 2011, contains more information about providing feedback to the Know Before You Owe endeavor.

In September, the CFPB requested that commenters compare two different designs as well as to compare two different loans using the same design. The purpose of the comparative approach is apparently to enable the public to determine ease of use.

We have reported continuously on the development of the Mortgage Disclosure, for example, here and here.

At this time, the CFPB has also undertaken a study to update the HUD-1 Settlement Statement. When that model is introduced, the CFPB will again ask for comments.
Fourth Model 
This fourth model is being tested with consumers and industry in Albuquerque, New Mexico. In that study, the CFPB is comparing a fixed-rate and an adjustable-rate loan, permitting the users to see how this prototype would work for both loan products.

Essentially, the model is based on a disclosure that combines the Truth in Lending form and the Good Faith Estimate.
Interesting Comments  
There have been various comments of interest to the development of the Mortgage Disclosure. Among the more interesting are: suggesting that the cost calculations show a 10 year time frame, to clearly distinguish separately the lender from the non-lender charges, to add more information about shopping for mortgages, and to more clearly explain the time-sensitivity of price comparisons.

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Mortgage Disclosures - Models
Fixed and Adjustable   

October 17, 2011



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