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What mortgage borrowers need to know about TILA-RESPA

By Marcie Geffner -

Despite repeated redesigns, the forms lenders use to convey information about a home loan to borrowers are notoriously complicated.

The latest attempt, this one by the federal Consumer Financial Protection Agency (CFPB), combines multiple documents into just two forms:

- A three-page “Loan Estimate” form
- A five-page “Closing Disclosure” form

In a brochure, the CFPB says the new forms will:

- Reduce paperwork and consumer confusion
- Help consumers understand complicated transactions
- Make it easier for consumers to compare loans and decide whether they can afford a home and mortgage, including property taxes and homeowner insurance
- Warn consumers about prepayment penalties and other loan terms they might want to avoid
- Make closing cost estimates more accurate
- Give consumers more time to review final terms and costs before they sign their closing documents

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