Few mortgage borrowers shop alternative loan providers, despite the extensive system of mandated disclosures that are supposed to help them do exactly that.The problem is that existing disclosures under Truth in Lending and the Real Estate Settlement Procedures Act need not be provided until three days after the lender receives a loan application, at which point the borrower is already heavily invested in the transaction. For most, it is then too late to shop. Regulators are aware of this and have been flirting with the idea of mandating some new disclosures that lenders must provide at or prior to the submission of loan applications.I critiqued a proposal of this sort by the Federal Reserve in 2009 and concluded that the disclosures proposed by the Fed would provide no help to s...
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