FTC Releases Mortgage Study
|June 14, 2007|
Improving Consumer Mortgage Disclosure: An Empirical Assessment of Current and Prototype Disclosure Forms: A Bureau of Economics Staff Report (June 2007) |
Executive Summary of the Report [pdf]
Full Text of Report [pdf]
The Federal Trade Commission today released a Bureau of Economics report presenting the results of a study that found that mortgage disclosure forms fail to convey key mortgage costs and terms to many consumers. The study also concluded that better disclosures can be created to help consumers understand the costs and terms of mortgages to enable them to make informed decisions about mortgage products.
“Mortgage disclosures designed more than 30 years ago can be confusing even for simple loans, and they do not address the variety and complexity of today’s mortgage products,” FTC Chairman Deborah Platt Majoras said. “Although mortgage disclosures, alone, will not prevent deceptive lending practices, consumers who understand mortgage terms and choices are less likely to fall victim to these practices.”
The study examines how consumers search for mortgages, how well consumers understand mortgage costs disclosures and the terms of their own recently obtained loans, and whether better disclosures can help consumers understand mortgage costs, shop for mortgage loans, and avoid deceptive lending practices.
The study’s key findings include: