As we have previously advised, the CFPB is required by the Dodd-Frank Act to combine the Truth in Lending and RESPA up front mortgage disclosures. In an effort to involve the public and the finance industry, the CFPB, over the past few months, has been asking for comments on different versions of simplified mortgage disclosure forms. In round one, the Bureau asked for comments on the front page—or “shopping sheet”— of the disclosure. Round two requested input on the second page of the disclosure which set out closing costs. The request for comment on the third round offered different ways to highlight and clarify some of the more confusing sections of the disclosure.
On September 12, 2011, the Bureau took a different approach by posting the disclosure of different loans using the same form of disclosure. The two forms— Jasmine and Nandina—each reflect a different loan product and consumers are being asked whether the disclosure form actually helps compare competing loan products and facilitates a consumer’s decision making. The Bureau is asking consumers whether the form enabled them to understand different features of the competing loan products and whether additional information or other means of comparison would be helpful.
In an attempt to determine whether the industry understands the disclosure forms and can explain the disclosures to their clients, separate industry forms are also posted on the Bureau’s website. Mortgage brokers are being asked to indicate which loan they would recommend to their clients.