Mortgage loan disclosure forms are notoriously complicated and difficult for borrowers to understand, despite the fact that these miserable pieces of paper have been debated, analyzed, focus-grouped, revised and reimagined to the "nth" degree in recent years.
Still, the newly minted federal Consumer Financial Protection Bureau is taking another run at the problem, trying to combine the two-page Truth in Lending, or TIL, form, and three-page Good Faith Estimate, or GFE, into "a single simpler form," according to two recent blog posts on the agency's website.
So far, the information is heavy on:
- Familiar boilerplate: "A mortgage loan is the biggest financial commitment most Americans will make in their lifetimes."
- Restatement of the problem: "These disclosures don't work if they give you too much information or if the information they provide isn't what you need."
- A mailing list: "Sign up for e-mail updates."
- A catchy slogan: "Know Before You Owe."
- Pleas for public input: "We need to hear from you."
The bureau has already met with consumer advocates, regulators, mortgage industry representatives, researchers and graphic designers. Next, they've promised to share the "draft designs" of their new form online and solicit comments from the public.
"Over the next few months," the blog states, "we will share our draft designs with you, right here on this website. As we create and revise different versions of the mortgage disclosure form -- remember, we’re combining two forms into one! -- we will post them online and ask what you think."
Meanwhile, the agency also plans to interview consumers, lenders and mortgage brokers about the draft designs, conduct five rounds of consumer testing in six U.S. cities and consult other regulators and small businesses. Then the public will have another chance to submit more comments before the form is released.
Hyperbole, boldface and exclamation points suggest a praiseworthy enthusiasm for a risky undertaking. But it's hard to hold out much hope for a truly better form, given the convoluted history, entrenched industry interests and irreconcilable objectives of comprehensiveness and simplicity. Skeptics might be torn between laughter at the agency's naivete and tears at the likely to be wasted government effort.
Bottom line? Good luck with that.
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