The Consumer Financial Protection Bureau is preparing to launch the third round of public comment on the reform of mortgage disclosures designed to combine the Good Faith Estimate and Truth in Lending into a single disclosure.
Heading into the third wave, the CFPB announced the key points gleaned from the second round of comments.
The first item to be addressed is to clarify "Cautions" to better communicate items that consumers should be careful of. Many comments found the use of a simple Yes or No was confusing. Second the presentation of fees continued to be a point of debate between the use of a concise grouping of fees or the more detailed itemization. The CFPB intents to continue to seek the appropriate level of detail in the disclosure of fees as necessary to help consumers make sound decisions. Third, the important dates section was pointed out as a key element that should be presented on the first page of the disclosure instead of the second. Lastly, commenters suggested that "points" charged related to a loan need to have their own subject line for better clarity.
Next week the bureau will post updated versions of proposed forms and encourage consumers and industry participants to provide comment on the effectiveness of the new forms' ability to clearly and completely communicate the loan offers made by a lender and easily compare to other offers. The CFPB has stated the intention for 5 rounds of public draft proposals before issuing a new rule requiring the use of the new disclosures.