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Consumer Financial Protection Bureau

CFPB Releases Fourth Round of Combined Mortgage Disclosure Forms

September 13, 2011

The Consumer Financial Protection Bureau released its fourth and expected final round of a combined mortgage disclosure form, this time asking for feedback regarding two different types of refinance products using the same version of the form.

One form, Jasmine, features a 7/1 ARM for a $120,000 loan, while the other form shows a 3/3 ARM for the same amount. In analyzing the forms, the Bureau would like to know which form you would advise consumers to use

The Bureau said it is shifting gears from comparing two versions of a form because in the real world, consumers compare different loan offers. The Bureau said it wants to ensure the disclosure actually helps consumers understand features of competing loan products, from the overall loan amount to estimates of taxes and insurance costs.

For the next week, the Bureau will test the two forms around Springfield, Mass. The Bureau indicated this is not the final version of the form. The Bureau expects to begin testing the HUD-1 in the fall.

Other highlights of the forms include the reappearance of the concept of tolerance and the listing of lenders title and title services fees as "Services You Can Shop For."

The CFPB also plans to ask consumers to focus on how other disclosure items required under the Truth in Lending Act are working for consumers. “For example, how clear are statements about reading your contract? Do people understand whether loans can be assumed by a subsequent purchaser?" the Bureau asked. The Bureau has developed a separate page to test these concepts.

The RESPA Task Force will once again review the new forms and provide feedback to the Bureau through the "Know Before You Owe" web tool. ALTA members are encouraged to provide feedback to the CFBP as well.

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