Michelle Singletary, “The Color of Money” columnist for The Washington Post has something to say about the two home loan forms the Consumer Financial Protection Bureau has recently begun testing. Last week, the agency announced the “Know Before You Owe” project to combine the two disclosure forms into a double-sided single document that purports to make the costs of a home loan clear.

She notes that currently, “Federal law requires that mortgage-loan applicants receive two documents: the two-page federal Truth in Lending Act mortgage disclosure form and the three-page Real Estate Settlement Procedures Act Good Faith Estimate. Both are supposed to give borrowers fundamental information about their loans. They are supposed to help them comparison-shop and inform them of how much they will owe.” (Many in our industry, and a fair number of consumers, I’m sure, would argue they fall woefully short of that goal.) She’s happy to share her thoughts on the subject at Bureau drafts new forms to make adjustable-rate mortgages’ true costs clearer.

As she says, “What the bureau is doing is quite significant. Like many of the new rules being implemented as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, updating the disclosure forms could help prevent people from taking on debt they can’t afford.” 

Personally, I prefer the first form for its clarity, although there’s certainly room for tweaking it a bit  Visit the website and contribute your thoughts about the design; make suggestions you feel are essential. This is our chance to tell the design committee what we'd want to know before we owe.