New mortgage forms will help consumers 'know' before they 'owe'

[:en]

A new wave of compliance guidelines established by the Consumer Financial Protection Bureau (CFPB) will take effect in January 2014. CFPB ​Director Richard Cordray said in a congressional hearing earlier this month that he didn't expect perfection from financial institutions, but rather "good faith efforts to come into substantial compliance" by the deadline.

One deadline that is a little further out, but just as critical, is one involving new mortgage disclosure forms, which the agency has completely revamped in an effort to streamline the application process.

Acknowledging that applying for a mortgage is "one of the biggest financial decisions a consumer will ever make," Cordray called the new mortgage disclosure forms "an important step toward the consumer having greater control over the mortgage loan process."

In a press release last week, the CFPB summarized the benefits of the "Know Before You Owe" initiative. The Loan Estimate (replacing the initial Truth In Lending statement and the Good Faith Estimate) and the Closing Disclosure (replacing the final Truth In Lending statement and the HUD-1 settlement statement) will provide three primary benefits to consumers:

  • Improved understanding of risk factors, costs and payment information
  • More information needed to compare different mortgage offers
  • The elimination of "bait-and-switch" tactics by lenders

The CFPB has claimed that the forms are much easier to understand than their predecessors, but how does it know for sure?

"Testing showed that participants who used the CFPB's new forms were better able to answer questions about a sample loan – a statistically significant improvement of 29 percent," the agency said.

These new documents will reduce instances of miscommunication between borrowers and lenders – circumstances that can eventually lead to late payments and foreclosures, which are detrimental to both parties.

But since these documents won't take effect until August 2015, lenders will need to rely on their existing risk assessment tools to make decisions about extending credit to borrowers.

[:fr]

A new wave of compliance guidelines established by the Consumer Financial Protection Bureau (CFPB) will take effect in January 2014. CFPB ​Director Richard Cordray said in a congressional hearing earlier this month that he didn't expect perfection from financial institutions, but rather "good faith efforts to come into substantial compliance" by the deadline.

One deadline that is a little further out, but just as critical, is one involving new mortgage disclosure forms, which the agency has completely revamped in an effort to streamline the application process.

Acknowledging that applying for a mortgage is "one of the biggest financial decisions a consumer will ever make," Cordray called the new mortgage disclosure forms "an important step toward the consumer having greater control over the mortgage loan process."

In a press release last week, the CFPB summarized the benefits of the "Know Before You Owe" initiative. The Loan Estimate (replacing the initial Truth In Lending statement and the Good Faith Estimate) and the Closing Disclosure (replacing the final Truth In Lending statement and the HUD-1 settlement statement) will provide three primary benefits to consumers:

  • Improved understanding of risk factors, costs and payment information
  • More information needed to compare different mortgage offers
  • The elimination of "bait-and-switch" tactics by lenders

The CFPB has claimed that the forms are much easier to understand than their predecessors, but how does it know for sure?

"Testing showed that participants who used the CFPB's new forms were better able to answer questions about a sample loan – a statistically significant improvement of 29 percent," the agency said.

These new documents will reduce instances of miscommunication between borrowers and lenders – circumstances that can eventually lead to late payments and foreclosures, which are detrimental to both parties.

But since these documents won't take effect until August 2015, lenders will need to rely on their existing risk assessment tools to make decisions about extending credit to borrowers.

[:es]

A new wave of compliance guidelines established by the Consumer Financial Protection Bureau (CFPB) will take effect in January 2014. CFPB ​Director Richard Cordray said in a congressional hearing earlier this month that he didn't expect perfection from financial institutions, but rather "good faith efforts to come into substantial compliance" by the deadline.

One deadline that is a little further out, but just as critical, is one involving new mortgage disclosure forms, which the agency has completely revamped in an effort to streamline the application process.

Acknowledging that applying for a mortgage is "one of the biggest financial decisions a consumer will ever make," Cordray called the new mortgage disclosure forms "an important step toward the consumer having greater control over the mortgage loan process."

In a press release last week, the CFPB summarized the benefits of the "Know Before You Owe" initiative. The Loan Estimate (replacing the initial Truth In Lending statement and the Good Faith Estimate) and the Closing Disclosure (replacing the final Truth In Lending statement and the HUD-1 settlement statement) will provide three primary benefits to consumers:

  • Improved understanding of risk factors, costs and payment information
  • More information needed to compare different mortgage offers
  • The elimination of "bait-and-switch" tactics by lenders

The CFPB has claimed that the forms are much easier to understand than their predecessors, but how does it know for sure?

"Testing showed that participants who used the CFPB's new forms were better able to answer questions about a sample loan – a statistically significant improvement of 29 percent," the agency said.

These new documents will reduce instances of miscommunication between borrowers and lenders – circumstances that can eventually lead to late payments and foreclosures, which are detrimental to both parties.

But since these documents won't take effect until August 2015, lenders will need to rely on their existing risk assessment tools to make decisions about extending credit to borrowers.

[:it]

A new wave of compliance guidelines established by the Consumer Financial Protection Bureau (CFPB) will take effect in January 2014. CFPB ​Director Richard Cordray said in a congressional hearing earlier this month that he didn't expect perfection from financial institutions, but rather "good faith efforts to come into substantial compliance" by the deadline.

One deadline that is a little further out, but just as critical, is one involvin
g new mortgage disclosure forms, which the agency has completely revamped in an effort to streamline the application process.

Acknowledging that applying for a mortgage is "one of the biggest financial decisions a consumer will ever make," Cordray called the new mortgage disclosure forms "an important step toward the consumer having greater control over the mortgage loan process."

In a press release last week, the CFPB summarized the benefits of the "Know Before You Owe" initiative. The Loan Estimate (replacing the initial Truth In Lending statement and the Good Faith Estimate) and the Closing Disclosure (replacing the final Truth In Lending statement and the HUD-1 settlement statement) will provide three primary benefits to consumers:

  • Improved understanding of risk factors, costs and payment information
  • More information needed to compare different mortgage offers
  • The elimination of "bait-and-switch" tactics by lenders

The CFPB has claimed that the forms are much easier to understand than their predecessors, but how does it know for sure?

"Testing showed that participants who used the CFPB's new forms were better able to answer questions about a sample loan – a statistically significant improvement of 29 percent," the agency said.

These new documents will reduce instances of miscommunication between borrowers and lenders – circumstances that can eventually lead to late payments and foreclosures, which are detrimental to both parties.

But since these documents won't take effect until August 2015, lenders will need to rely on their existing risk assessment tools to make decisions about extending credit to borrowers.

[:tr]

A new wave of compliance guidelines established by the Consumer Financial Protection Bureau (CFPB) will take effect in January 2014. CFPB ​Director Richard Cordray said in a congressional hearing earlier this month that he didn't expect perfection from financial institutions, but rather "good faith efforts to come into substantial compliance" by the deadline.

One deadline that is a little further out, but just as critical, is one involving new mortgage disclosure forms, which the agency has completely revamped in an effort to streamline the application process.

Acknowledging that applying for a mortgage is "one of the biggest financial decisions a consumer will ever make," Cordray called the new mortgage disclosure forms "an important step toward the consumer having greater control over the mortgage loan process."

In a press release last week, the CFPB summarized the benefits of the "Know Before You Owe" initiative. The Loan Estimate (replacing the initial Truth In Lending statement and the Good Faith Estimate) and the Closing Disclosure (replacing the final Truth In Lending statement and the HUD-1 settlement statement) will provide three primary benefits to consumers:

  • Improved understanding of risk factors, costs and payment information
  • More information needed to compare different mortgage offers
  • The elimination of "bait-and-switch" tactics by lenders

The CFPB has claimed that the forms are much easier to understand than their predecessors, but how does it know for sure?

"Testing showed that participants who used the CFPB's new forms were better able to answer questions about a sample loan – a statistically significant improvement of 29 percent," the agency said.

These new documents will reduce instances of miscommunication between borrowers and lenders – circumstances that can eventually lead to late payments and foreclosures, which are detrimental to both parties.

But since these documents won't take effect until August 2015, lenders will need to rely on their existing risk assessment tools to make decisions about extending credit to borrowers.

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