New Mortgage Disclosures A GREAT Idea

Finally, one federal watch dog agency is determined to help real estate consumers. Well, it’s about time!

The Consumer Financial Protection Bureau just unveiled new disclosure forms with the sole goal of helping borrowers better understand the terms of their home loans. How revolutionary! After all, for most of us, a home is the most expensive purchase we ever make.

For example, the first page of the form not only includes the basics of the mortgage (like the interest rate and the monthly payments), but also how they could change over time. The mortgagee also has to list the maximums so there are no nasty surprises five years down the line. All the closing costs have to be there, too. The form also discusses taxes and insurance. The goal is for borrowers to understand the total cost of the transaction.

If the rules go into effect, mortgage companies would have to tell consumers about the risks involved with prepayment penalties and negative amortization (where the loan balance increases, not decreases over time because the borrow is not paying the full amount each month.)

The new rules would require lenders to give the loan estimate paperwork within three days after borrowers apply for a loan. They will have to provide the five-page closing disclosure at least three business days before the trip to the title company. And guess what? The new rules would limit increases in closing costs that deviate from the amounts stated on their loan estimator form. Hallelujah! I’ve actually lost deals due to these nasty surprises.

I’ve been doing this 32 years and all the bank jargon still sounds like mumbo jumbo to me. Let’s hope the Feds make these recommendations law. Because it shouldn’t be this hard!!!!

No more obfuscation.

((hugs)) from your Las Vegas Real Estate Concierge

BETH Ellyn

BETH Ellyn

Managing Broker, Nevada

Office: 702.492.0531

Cell and Text: 702.324.6911

Visit www.offthevegasstrip.com