New Mortgage Disclosure Forms Maybe On The Way. It appears that the Dodd-Frank Act may actually have something in it that makes sense. A component of the Dodd-Frank Act directs the Consumer Financial Protection Bureau (CFPB) to combined and streamline “mortgage disclosure requirements into a single uniform document” that are required by the Real Estate Settlement Procedures Act and Truth-In-Lending Act. I interpret that as combining the Good Faith Estimate (GFE) and Truth-In-Lending (TIL) disclosures into one document that actually makes sense to Borrowers, and clearly discloses ALL fees.
About two years ago, both the GFE and TIL were expanded from one page documents, to a three page document for the GFE, and a two page document for the TIL. Now you would think that more pages would equal more disclosure, but in fact the opposite occurred especially with the GFE. Despite going from a one page to a three page document, the GFE became less transparent than the one page document. That is because on the one page document ALL fees were listed, but on the three page document some fees are combined into one single figure. For example Attorney fees, and Title Insurance are combined into one figure, as are taxes and homeowner insurance being escrowed. The new GFE also does not show the total monthly payment, it only shows principal & interest, plus PMI/MI. OH and by the way the government also did not think that it was important to show the Loan Program on this document.
According to CFPB Director, Richard Cordray, a panel will be created “to gather the input of the people who will be affected by our rules.” Hopefully that group of people will include, people like Loan Originators, who are familiar with the deficiencies of these documents, and can actually contribute to creating a new document that will accomplish what the new document is suppose to do.
If the this panel is able to accomplish what it is be directed to do, maybe we will finally see something positive from the Dodd-Frank Act.
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
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