Times Evaluations of the TILA/RESPA Disclosure Rules and the QRM-QM Proposal

The Times today published an editorial,What You Don’t Know About Mortgages, about the CFPB's new mortgage TILA/RESPA disclosures.  Though the editorial praised some aspects of the disclosure rules, it also called them disappointing, stating

[T]he forms fall short in the crucial task of helping consumers assess and compare the total cost of various loans. Without that information, it is difficult for borrowers to know whether they are getting the best deal.       

What’s needed, as the National Consumer Law Center has pointed out, is prominent display of the loan’s full annual percentage rate, a single measure of the cost of credit that incorporates the interest rate, closing costs and other fees. On the new forms, that number is not reported until Page 3. Worse, it is calculated in a way that understates the loan’s cost, because it omits the cost of title insurance and some other closing charges.

Yesterday, Floyd Norris had a column, Mortgages Without Risk, at Least for the Banks, on qualified residential mortgages, qualified mortgages, and other mortgages, how the rules governing them were intended to avoid a repeat of the subprime meltdown, and the take of Barney Frank and others on the pending proposal. Unless you already are well acquainted with the issues, the column is definitely worth reading.

Leave a Reply

Your email address will not be published. Required fields are marked *