In its ongoing efforts to better educate prospective homebuyers, the Consumer Financial Protection Bureau (CFPB) has released the latest in a series of tools as part of its “Know Before You Owe” mortgage initiative.
“Your Home Loan Toolkit,” launched Tuesday, provides a step-by-step guide to help consumers understand the nature and costs of real estate settlement services, define what affordable means to them, and find their best mortgage. The Toolkit, however, does not include reference to reverse mortgages specifically.
It joins other such resources in the CFPB’s Know Before You Owe initiative, under which new forward mortgage disclosure rules will take effect for lenders beginning Aug. 1, 2015.
“We fully support efforts by the CFPB to help inform and educate consumers who are working through the complexities of the mortgage process,” said David H. Stevens, president and CEO of the Mortgage Bankers Association (MBA), in a statement. “We look forward to reviewing the details in the Toolkit and providing our input.”
The toolkit is designed to replace an existing booklet that creditors currently must provide to mortgage applicants, which was initially developed by the Department of Housing and Urban Development (HUD).
It will be used in connection with the new Loan Estimate and Closing Disclosure forms that will be implemented in August. Creditors will be required to provide the toolkit to mortgage applicants as a part of the application process, and other industry participants, including real estate professionals, are encouraged to provide it to potential homebuyers, the CFPB says.
“This toolkit is a great resource for consumers navigating the home-buying process, and will help consumers make well-informed decisions about the biggest financial transaction of their life,” said CFPB Director Richard Cordray, in a statement. “The new mortgage disclosure forms coming in August will help consumers comparison shop for mortgages and avoid surprises at the closing table. We are releasing this toolkit well in advance of the effective date to help the mortgage industry come into compliance with the new rules.”
Written by Emily Study