Elizabeth Warren and the Consumer Financial Protection Bureau revealed two prototypes of mortgage disclosure forms Wednesday as part of the agency's effort to simplify documents for homebuyers shopping for mortgages.
The two prototypes combine the federal Truth in Lending Act mortgage disclosure form with the Real Estate Settlement Procedures Act to remove redundant information and allow consumers to make decisions based on clear and concise language, Warren said.
The sample loan forms, which are part of the CFPB's Know Before You Owe project, will undergo five rounds of testing and evaluation in six test markets.
During the testing stage, which ends in September, the new federal regulator will interview brokers, lenders and consumers living in Albuquerque, N.M.; Baltimore; Birmingham, Ala.; Chicago; Los Angeles; and Springfield, Mass.
"Getting stuck with the wrong loan can cost a family tens of thousands of dollars over the life of the loan, " Warren said while launching the initiative. "With a clear and simple form, consumers can answer two basic questions: Can I afford this mortgage? and Can I get a better deal someplace else?"
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