Simple Mortgage Disclosure Catching Fire

The idea of providing borrowers with a simple one-page mortgage disclosure, first developed by American Enterprise Institute resident fellow Alex Pollock, is catching fire with state banking regulators, industry groups, and even members of Congress.Rep. Patrick McHenry, R-N.C., said he is working with Rep. Al Green, D-Texas, to draft legislation that would require mortgage lenders to provide a simple disclosure so that homebuyers understand the terms and even the costs relative to their income. "This will relieve some of the confusion in the process," Rep. McHenry told an AEI seminar. The Conference of State Bank Supervision had developed its own version, and the state regulators want the Federal Reserve Board to mandate a simple disclosure form as part its initiative to curb abusive lending practices. The Mortgage Bankers Association plans to roll out a simplified disclosure in the next few days. Loan officer trainer Christopher Cruise told the AEI seminar that Mr. Pollock's one-page form pulls together 80%-90% of the information a borrower needs to know. "Literally everybody that I have talked to in the industry strongly supports this form," Mr. Cruise said.