Negotiate a mortgage for the home of your dreams! Use the box below to find a mortgage professional.
FTC Staff Files Mortgage Disclosure Comments with Banking Agencies
The Federal Trade Commission released staff comments to the federal banking agencies – the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration – in response to their request for comments on proposed illustrations of consumer information for subprime mortgage lending. In their comments, FTC staff support the agencies’ efforts to develop mortgage disclosures to help subprime borrowers make better informed decisions. FTC staff also recommend that the agencies consider testing the effectiveness of their proposed new disclosures and consider undertaking a more comprehensive effort to improve federal mortgage disclosures.
The comments describe two studies conducted by FTC staff that demonstrate the potential benefit of using consumer research to test mortgage disclosures. One study included several dozen extended interviews and systematic testing with more than 800 mortgage customers. Findings from the study are striking – current mortgage disclosures frequently fail to convey key information to consumers, often are misunderstood, and may contribute to information problems in the mortgage market. These findings apply to both prime and subprime borrowers, and to the evaluation of simple, fixed-rate mortgages. As part of the study, FTC staff also developed a new prototype disclosure document consisting of a one-page, comprehensive summary of key loan information and two pages of additional loan details. Tests of the prototype disclosure document revealed significant improvements in consumer recognition of mortgage costs, demonstrating the feasibility and potential benefits of a single, comprehensive, consumer-friendly disclosure document. A second study found that adding more information to disclosures does not always improve consumer understanding. The mortgage broker compensation disclosures tested in the study led to misunderstanding of loan costs and biased loan choices.
For the rest of this article please visit www.ftc.gov.
Our Fast Mortgage Regional Resource Center is a simple tool that provides local information!
Legal Disclaimers
The information provided on this site is not intended to be medical, legal, real estate, home remodeling, financial or professional advice but merely conveys general information, suggestions, and ideas. Actual professionals should be advised to determine the correct information and laws. This site is for advertisement purposes only. Errors may exist. Please consult a local professional for the most accurate information related to issues that are commonly encountered. Your access to and use of this website is subject
to additional Terms and Conditions. About
Us | Site
Map
