Lenders call for simplified disclosures

Buyers planning on moving to a new home in the near future may receive newly simplified disclosure forms throughout the homebuying process.

However, the leaders at a number of major trade organizations for the lending industry cautioned federal officials from making changes that might make it more difficult for buyers to qualify for a mortgage. In a letter to the Treasury Department, Federal Reserve and the Department of Housing and Urban Development, a contingent led by the Mortgage Bankers Association cautioned that any action to simplify mortgage disclosure forms could only be successfully accomplished if the government agencies worked together. In the past, separate efforts have forced banks to tighten their lending standards even further, said the letter.

The issue surrounded combining elements of the Truth in Lending Act and the Real Estate Settlement Procedures Act into one disclosure system. Both are designed to protect consumers and provide for transparency during the homebuying process. Lenders say they support combining the two, since it would give relocating families fewer confusing forms to review and make buying a home simpler.

A number of federal groups and figures have promised measures that would make buying a home less confusing for consumers. Elizabeth Warren, special advisor for the new Consumer Financial Protection Bureau, promised one of her group's first missions will be to simplify the credit and mortgage lending processes.
 

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