New Standardized Mortgage Disclosure Forms to be Tested in May

By Kyle Chezum Updated on 4/19/2011

The Consumer Financial Protection Bureau made a statement indicating that new standardized mortgage disclosure forms will be tested in the marketplace in May.  The news came from Elizabeth Warren, special adviser to the Treasury Secretary and leader of the Consumer Financial Protection Bureau.

“We will be looking at our first prototypes [of the new form],” she said.  She specified that these first "trial run" mortgage disclosure forms will begin to appear in limited areas in May, just weeks away.  The forms have been developed jointly by the CFPB and representatives from major banks who have offered their opinion as consultants on the matter.

The new forms are designed to provide a more accurate range of information and better disclosure to home loan borrowers, who, up until now, have had to deal with multiple separate and sometimes conflicting documents when applying for a loan.  At present, borrowers receive at least two separate disclosure forms as well as forms that outline credit costs and closing costs separately.  Many of these forms are very long and confusing.

The CFPB has made it a goal to streamline the mortgage process by making sure consumers have all the information they need in one place.  More than this, though, the CFPB wants to make sure consumers are better able to understand the information they receive.  This will likely lead to smarter borrowing and lending in the future.