“Know Before You Owe” Forms To Take Effect

Lenders Prepare To Implement New Mortgage Disclosures

Following closely on the heels on working to implement the Consumer Financial Protection Bureau (CFPB)’s rules around Ability to Repay/Qualified Mortgage regulation, lenders are again having to rally to prepare for another major shift in the industry. Effective August 1, 2015, lenders will need to utilize a set of mortgage forms that the CFPB is calling “Know Before You Owe.” These mortgage disclosures are intended to simplify the mortgage process for both the consumer and the lender.

Prior to these new forms, many consumers have come to the closing table only to find a mountain of paperwork that is oftentimes overlapping and confusing. The disclosures set forth by the Real Estate Settlement Procedures Act and Truth In Lending Act after a borrower submits his or her mortgage application and before he or she closes have been redundant and unclear. To alleviate that issue, the CFPB has worked for two years to develop the new “Know Before You Owe” disclosures.

These forms are designed to help borrowers best understand their costs and risks when closing. They are structured in such a way that the consumer will find coversheets explaining his or her obligations, giving a clear overview to borrowers so they will no longer leave the closing table feeling anxious and overwhelmed. These disclosures will mark a major shift in the mortgage industry.

As the mortgage process changes, borrowers might be left feeling confused. So you can get expert guidance through these shifting regulations, contact Avis Lending. With offices in Lahaina, Hawaii and Irvine, California, we are here to answer all of your West Coast mortgage questions. We hope that the “Know Before You Owe” disclosures will simplify the mortgage process in the long run, but are here to guide you through any confusion as they are implemented.

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