Industry NewsMortgage

Regulators float new loan disclosure forms

CFPB trying to combine best features of TILA, RESPA loan disclosures into one form

The Consumer Financial Protection Bureau has released draft proposals for a simplified mortgage disclosure form that will replace the separate forms borrowers are currently provided to satisfy the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA).The CFPB is requesting feedback from consumers and the lending industry on the proposed forms, saying it's the first step in a process that will last months.The bureau wants to know if the two-page draft loan disclosures it's proposing would help consumers understand the true costs and risks of a mortgage, and whether lenders and mortgage brokers could easily explain the form to their customers.Lenders and other real estate industry players have long complained that having two sets of loan disclosures is confusing to consumers. Consumer advocates have said that loan disclosure forms in use during the housing boom did not make consumers aware of the pitfalls of "exotic" loans offered by some lenders.The...