Markets & Economy

Consumer Financial Protection Bureau’s new mortgage loan disclosures try to do too much

Borrowers would be better served by simpler forms encouraging them to ask for professional help

The mighty Consumer Financial Protection Bureau has delivered new works. We have until August 2015 to get used to the new mortgage Loan Estimate and Closing Disclosure, which will replace the current Good Faith Estimate, Truth In Lending, and HUD-1 forms. These forms are an improvement over the 2010 GFE, but so would have been three blank pages, the Magna Carta, or the Gettysburg Address. The demise of the 2010 GFE will instantly reduce demand for landfills. Many people are so frustrated with government efforts like this that they hate government. Not me. We need financial regulation. Smart regulation, which is possible. After the credit bubble, which fed the housing bubble, a period of reinvention was inevitable. The Dodd-Frank legislation began the process, a great, emergency spasm. Four bad ideas stick out: the Volcker Rule (more another time), skin in the game (retention of 5 percent of mortgages securitized), "qualified mortgage" (QM) and "qualified residential mortgage" ...