New mortgage disclosure forms -- streamlined to help borrowers better understand loan terms and fees -- will take effect in August 2015, the Consumer Financial Protection Bureau (CFPB) said. The documents, which replace the "good faith estimate" now commonly used industrywide, aim to give home buyers a better understanding both when comparing loan products and when signing settlement paperwork.
The new versions will break down what borrowers can expect to pay each month, including taxes and insurance; and closing documents spelling out fees for appraisal, title insurance, and other items will be forwarded to borrowers three days before settlement. They will strive to explain the terms in more accessible language. While earlier efforts to overhaul mortgage forms have spawned industry resistance, the lending community has expressed appreciation for the generous lead time the CFPB has given it in terms of compliance.