New mortgage disclosure form drafts released by the Consumer Financial Protection Bureau in May are on the right track, according to an American Bankers Association letter submitted to the CFPB this week.
The two drafted disclosure form options, which are currently posted on the CFPB’s website with a request for feedback and comments, “provide an excellent base to advance toward meaningful reform of the existing mortgage disclosure process,” ABA wrote.
The forms aim to combine the Good Faith Estimate and Truth in Lending forms into one, and to simplify the disclosure process for borrowers and lenders.
Of the two options, a focus group conducted by ABA found the draft called “Ficus Bank” to be more clear and organized.
Other comments from the ABA include a concern over how the form groups and sums estimated closing costs, and the lack of a place for consumers to sign and date the document.
More context will be important, however, the ABA notes. “CFPB has not revealed what existing disclosures these forms will replace. These elements are crucial to determining whether the disclosure reforms are meaningful and whether banks can effectively implement the changes.”
View the letter from ABA.
View the two disclosure form drafts.
Written by Elizabeth Ecker
