“New and Improved Mortgage Closing Forms Coming Soon”
I have been watching and reviewing the so called new and improved RESPA and TILA forms. The thought process is the existing forms are difficult for the public to read and understand. It is interesting that when the FED was putting these forms together, many of us wrote and emailed the folks putting the existing forms together that, they are extremely difficult to for the public to understand. Guess what, they said NO, they are much easier to understand, than its predecessors. Are you kidding me?????
I closed a mortgage for a pretty smart lawyer recently, that closes mortgages all the time. He told me, that he didn’t understand the forms. He asked a brilliant question, how does the average public understand this stuff? He asked why the original forms that were used in recent years are being used, they were much easier to understand? I told him that the Dodd-Frank Bill required a new and improved version. I loved his comment. They are so stupid!
The new versions will hopefully be better, but so far, I haven’t seen much improvement.
Industry reacts to new mortgage forms, it's not all good
On July 13, the U.S. House of Representatives Committee on Financial Services Subcommittee on Insurance, Housing and Community Opportunity held a hearing concerning recent changes to mortgage origination. One of the primary topics during that hearing was the integration of the Good Faith Estimate (GFE) and Truth in Lending Act (TILA) mortgage disclosure forms.
Kelly Thompson Cochran, deputy assistant director, office of regulations at the Consumer Financial Protection Bureau (CFPB) testified on the background of the new form and indicated the project is one of the CFPB’s highest priorities.
“Last year, the Dodd-Frank Wall Street Reform and Consumer Protection Act not only created the CFPB, but also amended Federal statutes governing mortgage loans, including TILA and RESPA,” Cochran said. “The amendments require the CFPB to publish a single, integrated model disclosure for mortgage loan transactions that includes disclosure requirements of both TILA and RESPA. The purpose of the integrated disclosure is to ‘facilitate compliance’ with TILA and RESPA, and to aid borrower understanding of the transaction ‘by utilizing readily understandable language to simplify the technical nature of the disclosures.’ The Dodd-Frank Act requires the CFPB to publish proposed new forms and regulations by July 21, 2012.”
According to Cochran, the bureau plans to create shorter forms that are more clear and easier to understand.
“We have focused on making it easier for consumers both to understand the key terms of the loan they have been offered and to compare offers to find the loan that best meets their needs,” she continued.
The CFPB released one set of prototypes on May 18 and a second set on June 27. Cochran noted the bureau is pleased with the results so far.
Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x116
Fax: 860 647-8940
Cell: 860 836-9294
Email: joe@righttracfg.com
Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.
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