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Washington
CFPB to release third draft of combined mortgage form
WASHINGTON (7/29/11)--The third draft of the Consumer Financial Protection Bureau’s combined form for Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) disclosures will be released next week, the CFPB said in a Thursday release. The combined form is required under the Dodd-Frank Act and is intended to reduce mortgage lender regulatory burden and make mortgage disclosures less confusing to consumers. The CFPB has released and collected comment on two separate drafts of a simplified mortgage disclosure form. The agency said it has received more than 18,000 comments since the first draft of the combined form was released in May. The CFPB previewed some of the issues it will look at more closely in this third draft of its new mortgage form. Those issues include:
* Rephrasing the way that borrowers are warned of potential issues with interest rates and monthly loan payments; and * Determining “the appropriate level of detail of fee disclosures for consumers.” The CFPB said that commenters “were divided over the benefits of greater itemization of fees versus a simpler, more concise format” on the second page of the form.
The CFPB will also move the “important dates” section of the form onto the front page, and will put sections of the form addressing mortgage points “on its own subject line for better clarity.” The Credit Union National Association (CUNA), leagues and credit unions have worked with the CFPB on this project. For instance, CUNA in May met with the CFPB to discuss the first stage of the streamlining process and additional meetings are in the works. CUNA has urged the CFPB to continue to reach out to stakeholders as it moves forward with this and other projects. The CFPB, in blog posts and official reports, has said it is "committed to remaining attentive" to the concerns of credit unions and other small financial institutions, and looks forward to addressing the concerns of credit unions and community banks throughout the development of CFPB priorities. For the CFPB release, use the resource link.
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