Development of New Mortgage Disclosure Laws Announced

By Kyle Chezum Updated on 1/14/2011

1/14/11

The Consumer Financial Protection Bureau announced its plans to create simpler, stricter regulations on mortgage disclosure.  The goal of the regulations is to allow homebuyers to more easily and accurately compare mortgage rates and terms offered by different lenders.

Simpler forms and broader disclosure may have a negative effect on the profitability of large banks such as Bank of America, Wells Fargo, and JP Morgan Chase.  Alex Pollock, a former banking executive, claims that “if buyers are better informed and understand the financial commitments they are entering into, they will be better able to make comparisons among lenders and the market will be more competitive.  In competitive markets, profit margins are -- and should be -- driven down to the level of the cost of capital.”

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