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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 [list no longer available] to receive notifications about Know Before You Owe. And again (we can’t say it enough): thank you.