Industry NewsMortgage

New mortgage form a grand idea

Perspective: HUD's new good faith estimate is chock-full of improvements

It's easy to complain about government paperwork, but sometimes something as seemingly simple as a new form can be worth much more than the paper it's printed on. Such is the new standardized and borrower-friendly Good Faith Estimate that has been proposed by the U.S. Department of Housing and Urban Development. The new form is long overdue, especially in comparison with the forms currently in use, which have created a state of confusion that could be cited as a contributor, if perhaps not a chief cause, of the nation's subprime mortgage crisis. The new form is four pages long, but contains many significant improvements over the forms borrowers have received in recent years. The two-column, four-color design is both attractive and easy to read, which should make the form more likely to be read, especially if it's reproduced as designed. The form discloses basic loan terms in plain English that's free from unnecessary jargon. Six of the most important disclosures are stat...