Bank of America today officially retired the Countrywide Home Loans name, rolling out the Bank of America Home Loans brand and announcing a new one-page loan summary form.
The one-page "Clarity Commitment" loan summary form doesn’t replace legal loan disclosure documents, but makes clear the interest rate, terms and other details of the loan in plain language, Bank of America said.
In an interview with CNBC’s Jane Wells, Bank of America Home Loans President Barbara Desoer said the new loan summary form makes borrowers aware of what their maximum payments and fees will be.
The one-page summary form is an opportunity for Bank of America Home Loans to talk about the company’s "brand promise," Desoer said, which is "being a responsible lender and insuring successful homeownership."
Desoer said she believes Bank of America Home Loans is the first company to offer a one-page loan summary form.
Regulators are currently at odds with some real estate and lending industry groups over the issue of loan disclosures.
The Department of Housing and Urban Development has mandated that lenders begin using a standardized three-page Good Faith Estimate (GFE) by the end of the year. The standardized GFE form is one of several changes to the Real Estate Settlement Procedures Act, or RESPA, that HUD says will help consumers shop for the best deal on a loan and settlement services.
The new GFE requires mortgage brokers to credit yield-spread premiums — rebates paid by lenders when borrowers take out loans that carry higher interest rates than they might otherwise qualify for — to the borrower’s closing costs.
Loan originators are barred from changing service fees quoted on the GFE after interest rates are locked, and charges for required settlement services like title insurance can’t change by more than 10 percent if they are selected or identified by loan originators.
In a Feb. 9 letter to Housing Secretary Shaun Donovan, groups including the Mortgage Bankers Association, the American Escrow Association, the American Bankers Association and the American Financial Services Association asked HUD to withdraw the RESPA rule change and coordinate with the Federal Reserve Board’s ongoing efforts to update Truth in Lending Act (TILA) disclosures. RESPA and TILA are provided simultaneously to the consumer at application and at closing, the groups said, and should be complementary (see story).
MBA President John Courson issued a statement in support of Bank of America’s Clarity Commitment loan summary form, saying an "educated, informed borrower is far less likely to end up in a loan they do not understand and cannot afford. Efforts like these will help restore faith and rebuild confidence in the housing and mortgage markets."
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