In the first three rounds of Know Before You Owe, we asked you to compare different draft versions of a simplified mortgage disclosure form. Round 1 was about designs for the front-page, the “shopping sheet.” Round 2 was about the second page, which presents the closing costs. Round 3 offered different ways to highlight and clarify some of the more confusing sections.
This time, we’re doing something slightly different.
We’re asking you to compare two different types of loan products using the same version of the form. If you’re a consumer, which product would you choose? If your work puts you in a position to advise potential borrowers, which would you recommend?
We’re shifting gears for a simple reason: Comparing two versions of a form is useful, but in the real world, consumers should be able to use disclosures to compare different loan offers, not different forms. We want to make sure the disclosure actually helps consumers understand features of competing loan products, from the overall loan amount to estimates of taxes and insurance costs.
As you compare the forms, think about what information you were able to use to make your decision, and what additional information you might need. What questions would you have after looking at these two loans using this version of the form?
This is not a final version of the form. For the next week, we will be testing two forms in the Springfield, MA, area. We also are using this in-person research to learn about how other disclosure items required under the Truth in Lending Act are working for consumers. For example, how clear are statements about reading your contract? Do people understand whether loans can be assumed by a subsequent purchaser? We have developed a separate page to test these concepts, and we will be using it with each of the two forms.
As always, you will be able to tell us if you think key information is missing, or if you think some sections would be more effective if we presented them differently. For instance, would the “Comparisons” be more helpful to consumers if we put them somewhere else?
We began Know Before You Owe in May so the people who will use these forms could help us make them better. Understanding how you will use them to make choices is an essential part of that.
Help us improve disclosure. Weigh in today.