A new proposal by the Consumer Financial Protection Bureau will give borrowers a concise, three-page mortgage disclosure form in place of two overlapping forms that consumers currently receive under federal rules.
The plan follows over a year of research on how to streamline and simplify the application process for repayment. Following the financial crisis, mortgage applications increased but consumers were given complicated paperwork to fill out, which also caused the bureau to be created in the first place.
As reported by the Wall Street Journal, consumers would receive the three-page "loan estimate" within three days of applying for a mortgage.
"For too long, mortgage disclosures have done a poor job of presenting the key terms that matter most for consumers," Richard Corday, the CFPB's director said in prepared remarks prior to a speech in Las Vegas on Monday. Corday added that "consumers have had trouble even understanding the deal they are making, let alone being able to compare loan offers."
Previously mentioned in this blog were the possibilities of lenders seeing an influx of hopeful borrowers, due to the changing mortgage rates along with increasing rental prices. Choosing to invest in loan management software would be an advantageous move, to assist in keeping track of new and existing customers.
Specifically, according to the May Realtors Confidence Index, higher residential rates were reported by 54 percent of realtors. Rates that stayed consistent and those that lowered rental costs were reported by 16 percent and 11 percent, respectively.
With more individuals possibly looking to buy a home due to rising rental costs, and thus, possibly applying for a mortgage, lenders should also consider using an amortization calculator to help create monthly payment plans that are applicable to varying types of income.