Know Before You Owe: Designing a New Disclosure

This is the second in a series of blog posts about the Know Before You Owe project. To stay informed, sign up for e-mail updates.

If you were designing a better mortgage disclosure form, how would you do it and where would you start? Over the past several months, we have been hard at work thinking about these questions.

We started with the current disclosure forms, studying their strengths and weaknesses. We’ve also met with lots of different experts – from consumer advocates, regulators, and industry representatives to researchers and graphic designers — to get their thoughts. These people gave us a lot of ideas about what information matters most when choosing a mortgage loan and how to communicate it clearly.

But expert input isn’t enough because it leaves out an important set of voices. We also need to hear from consumers, who need the disclosure to be clear so they understand the loan terms they’re being offered – and can compare different offers easily. We need to hear from you.

So, over the next few months, 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.

Maybe the total cost of the loan should be clearer. Maybe some information would look better as a graph than as a list of numbers. Maybe there are some terms that make sense to technical experts but sound like gibberish to individual consumers. That’s the kind of input we need to design a better disclosure.

You can start right now by signing up on our Know Before You Owe page. Once you do, you’ll get an e-mail when it’s time to weigh in. We’re going to revise and repost the draft form repeatedly over the next several months, so getting quick feedback from you is especially helpful.

Also, use the “share” links on that page to spread the word. If you know anyone who is thinking about applying for a mortgage loan, or who has one and is struggling to understand it, we want to hear from him or her too. We want your help to get the word out.

As we ask for your comments online, we’ll also visit cities across the country to test the draft disclosure forms. During our visits, we will interview consumers, lenders, and brokers about what they find helpful or confusing in our draft designs.

After five rounds of this testing, in six cities and with your input online, we expect the revised form to be a lot better than the old ones. Then, after consulting with other regulators and small businesses, we will issue a proposed rule and give the public a chance to submit written comments on the revised form. It’s one more chance to weigh in on our proposed final design. After that, we will go through the comments, make any needed changes, possibly do one last test, and come out with a final rule unveiling the final version of the form.

We hope our continued outreach will allow us to make the disclosure better and better, learning what works and what doesn’t, until we have a product that makes a real difference for consumers. So visit this site often, and remember to sign up so that you know when it’s time to have your say. Share your opinions freely! Down the road, the disclosure we design together may be the one that you or someone you care about will use when applying for a mortgage loan. So, it has to work for you. That’s the bottom line.

Due to technical issues, the commenting feature of our blog is temporarily unavailable. We’re working to bring this functionality back, and look forward to hearing your feedback and comments about the CFPB’s work soon.