With “Know Before You Owe”, CFPB Takes Steps Toward A Single Mortgage Disclosure Document

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Say what you want about the Consumer Finance Protection Bureau, it is certainly attempting to carry out its charter.

In the latest effort to streamline mortgage legislation, the Consumer Financial Protection Bureau formed a small business panel that will condense mortgage disclosure requirements into a single uniform document. Along with loan estimates and disclosure terms, the panel will be examining various requirements set forth by the Real Estate Settlement Procedures Act and Truth in Lending Act, both of which Dodd-Frank has called for to be streamlined.

The program is called "Know Before You Owe".

But the CFPB is not singling out the mortgage industry for change. Payday loans, student loans, practically any industry that touches the finances of the public is under scrutiny, and may undergo some type of transformation. And it has hosted several public comment periods through its website.

In the case of the disclosures, the principal aim is to increase both the efficiency and transparency of the lending process, which the bureau hopes to achieve by gathering commentary from mortgage lenders around the country. According to the CFPB, the creation of the panel was based on “form-testing activities” they conducted in nine cities and over 27,000 comments received from sources that included both the public and industry professionals.

The small business panel will be employing the same method to create the single disclosure requirements document, which the CFPB aims to propose in July 2012.