Category: Policy & Compliance

Know Before You Owe: The last dance…or is it?

This week we are in Austin, Texas! We’re conducting the final round of testing of the integrated disclosures you receive at two different points in the mortgage process. You receive the first when applying for a loan, and you get the other at closing. After this, we’ll be shifting to the second phase of this project: writing the proposed rules for these disclosures. But before we move on to the next phase, we need your help one more time.

We’d like you to share your thoughts on these revised prototypes for the Loan Estimate and the Settlement Disclosure. Because there is only one prototype for each disclosure, we’re not going to use the side-by-side comparison tool this time. To weigh in, post a comment to this blog or email us at KnowBeforeYouOwe@cfpb.gov.


Tupelo Bank settlement disclosure; click the link below to view it full size

View the full size loan estimate.


Basswood Bank settlement disclosure; click the link below to view it full size

View the full size settlement disclosure.

As you look at these prototypes, think about these questions:

  • Can you easily find key loan terms?
  • Are you able to identify changes to the loan terms or costs?
  • Do you know who to contact to discuss your loan or changes to your loan?
  • Do you have the information you would need to feel comfortable closing on the loan?
  • Are the disclosures easy for lenders and settlement agents to use and explain to consumers?

You’ll notice that these prototypes use a similar format for closing costs, enabling the two forms to work well together. We’ve also tried to make the forms look consistent in other ways, like using similar terminology. Before they sign on the dotted line, we want consumers to have a clear understanding of both what they owe and whether it’s what they were expecting. That’s what Know Before You Owe is all about.

As we test these revised prototypes this week with consumers and industry in Austin, we’ll review your feedback, too. Then we’ll take what we’ve learned to revise the prototypes again.

Once this round is over, we’ll put our suitcases away and get to work on writing the rules that govern these disclosures. It’s a tough job, because the rules have to be clear enough so that industry understands how to fill out the forms. And if there’s anything that we’ve learned from you, it’s that there is no lack of variety when it comes to mortgage loans and real estate transactions.

Over the next few months, we will be working on the proposed rule. Although you won’t hear from us as often, please be on the lookout for more information about our upcoming SBREFA panel process. During SBREFA, we will reach out to small financial service providers about the potential impact of our prototype disclosures and the proposals we are considering releasing this summer. During SBREFA and after we release the proposed rule, you will have the opportunity to learn more and to provide your feedback.

For now, we hope you’ll take the opportunity to provide us with feedback on these prototypes. We want to know what you think! If you want to share your thoughts with us, simply post a comment to this blog or shoot us an e-mail.

It’s hard to believe that nine months have passed since we first started this project. Each month, we presented different versions of the prototype disclosures and asked for your thoughts and feedback on the forms. In each round, you gave us your recommendations and voiced your concerns, which helped us create forms that work better for you. It’s been a long haul, and we can’t thank you enough for sticking with us.

You have made this project a success, most importantly by making these disclosures better. We hope you’ll provide us with feedback on these disclosures in the comments or by e-mail. And keep an eye out for our proposed rule this summer!

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.