‘Know Before You Owe’ Forms On CFPB’s Agenda

Posted by Patrick Barnard on November 19, 2013 No Comments
Categories : Residential Mortgage

The Consumer Financial Protection Bureau's (CFPB) rule requiring banks to use more simplified mortgage paperwork will reportedly take effect on Aug. 1, 2015, without an exemption for small lenders.

Richard Cordray, director of the CFPB, is expected to unveil details about the new ‘Know Before You Owe’ forms tomorrow at a field hearing in Boston, according to Bloomberg News.

The concept for the new, standardized mortgage forms was first introduced in 2011 by Sen. Elizabeth Warren, D-Mass., an outspoken proponent of mortgage finance reform who helped conceive and establish the CFPB. The forms – which are required under the provisions of the Dodd-Frank Act – are designed to help consumers understand if they can afford a mortgage and if they can get a better deal elsewhere.

Camden Fine, president of the Independent Community Bankers of America, told Bloomberg News that the new rule ‘will affect every lender, every title company, and every single borrower and property seller – there won't be any small creditor carve-outs on this rule at all.’

Although the CFPB has been tight lipped on the details of the final versions of the new forms, prototypes include information such as interest rates, monthly payments and closing costs in a simplified, easier-to-read format.

Smaller lenders have been pressing the CFPB for an exemption to the new rules, saying the burden is unjustified because they have close relationships with customers.

For more on ‘Know Before You Owe,’ click here.

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