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Know Before You Owe: What’s next


Four times since May, we have asked you to take a few minutes to help us create a simpler mortgage disclosure form. Each time, you told us what you liked and disliked, and what you thought was effective at communicating important loan information.

From what to include (like total payments, a signature line and certain closing information) to design details (like black tabs and grey shading), your feedback has been invaluable. You have sent us more than 24,000 comments that have given us a clearer understanding of what works, what doesn’t, and what else you’d like to see. Thank you for helping us make Know Before You Owe such a success.

Last month, we changed what we asked you to do. Instead of comparing two different designs, we asked you to compare two different loans using the same design. We wanted to see if the design enabled you to tell us which product you would choose for yourself or recommend to a customer. Your comments showed us that the design is helping you find the information you want to make your choices, and that is encouraging.

This week, we’re testing a revised design with consumers and industry in Albuquerque, New Mexico. We’re giving you a break for this round, but we want you to see what you’ve helped us achieve, so take a look at the newest prototype. We’re comparing a fixed-rate and an adjustable-rate loan, so you can see how this prototype would work for both. We are happy to keep our conversation going, so if you’d like, respond to this post in comments or send us an email with your thoughts.

So far, we’ve been testing a disclosure that combines the Truth in Lending form and Good Faith Estimate that you get after you apply for a mortgage loan. But what about at the other end of the transaction? When you close your mortgage, you get a new form that discloses the final terms and costs. Well, we’d like that disclosure to be just as clear and effective as the application disclosure will be, thanks to you. So, stay tuned because soon we will be sharing a prototype closing disclosure and asking for your feedback.

And, stay with us throughout this process, because this isn’t the last you’ll see of the application disclosure. It needs to work together with the closing disclosure, so we’ll be asking for your feedback on both in the future. We created Know Before You Owe in May so the people who will use these forms could help us make them better. Please continue to help us as we move into this next effort.

Make sure you know about the next opportunity to weigh in. Sign up to receive notifications about Know Before You Owe. And again (we can’t say it enough): thank you.

  • Sharms

    The email link is broken and the email came back undeliverable.

  • Lisa

    From this consumer’s standpoint, both of these forms are a breath of fresh air. The design is straightforward and uncluttered- a far cry from the dozens of pages of miniscule type I saw the last time I applied for a mortgage. The information is clear, concise, and complete. It provides me with all the information about initial and future costs I need to know to evaluate the mortgage and the addtional information about what would happen if I miss a payment, how my mortgage would be serviced, etc. are very valuable additions. This was information that was never presented to me before.

    This product demonstrates an outstanding commitment to responding to consumer needs and balancing it with regulatory requirements.

    This process demonstrates the highest level of achievement in the public sector. I truly hope all offices in Federal, State, and Local government look to this effort as a model for their future endeavors.

  • Msmith

    As a consumer who is also in the banking industry, this form is getting better.  Finally with this round of designs the late payment, servicing, and assumptions have been addressed.  However, the inclusion of Lender Cost of Funds concerns me as I do not understand how this information relates to the consumer as every institution’s cost of funds should be comparibly the same, and will the average consumer understand what it means?

  • Mark Mcdonough

    We should seriously look at the originating entity being responsible for all costs in any consumer real estate transaction.This make the originator responsible for the integrity of all vendors(tx service,appraisal etc) and the liquidity of the transaction on a go forward basis.Having the detail of the GFE the TIL the redisclosure,change of circumstance etc is ridiculous and confusing to everyone involved.A mortgage is a commodity,a borrower is borrowing x dollars to be paid back in x montghs at a payment of x and an intrest rate of  x with a total of payments of x.Thats all.The market has corrected previous sins.The extension of liability to vendors by disclosure has created an idiotic pile of documents that wikll only increase the future blame game when something goes wrong.

    Having the level of disclosure nonsense that exists nowis like buying a piece of furniture that allows you to compare the cost of the stain and varnish vrs a competitors cost of stain and varnishNo one cares!!!its the furniture you want.The current system has created a bottleneck in qualifying borrowers and faciltating loans.Values will continue to slide as the regulatory onus has created a sysytem that less and less people can qualify in or make a living in.  

  • frustrated

    When will you respond to e-mail questions submitted on line by industry participants? It has been over three weeks since i submitted questionbs and I have heard nothing.

The CFPB blog aims to facilitate conversations about our work. We want your comments to drive this conversation. Please be courteous, constructive, and on-topic. To help make the conversation productive, we encourage you to read our comment policy before posting. Comments on any post remain open for seven days from the date it was posted.