By Maya Jackson Randall
Buying a home produces enough documents to make your head hurt — or your hand from signing all of them.
So this explains the ongoing federal effort to simplify documents borrowers receive during the home-buying process with new forms that make closing costs and final loan details easier for consumers to understand.
The U.S. Consumer Financial Protection Bureau hopes to slash by 50% the intimidating stack of papers, but the bureau’s latest initiative on closing documents could actually put another sheet of paper in the hands of consumers.
The bureau has unveiled two draft mortgage forms. One of the bureau’s prototypes is six pages. The other is five. In comparison, the current closing documents usually include a two-page Truth in Lending disclosure form and a three-page form called a HUD-1 Settlement.
But the agency doesn’t seem worried about the one-sheet difference. It’s mostly focused on consolidating information in a way that makes the costs and terms of a loan easier to understand. It also says its hands are slightly tied because the 2010 Dodd-Frank law has required more information to be disclosed to homebuyers.
“Basically, we’ve boiled down content that could have filled 10 pages into five or six,” the bureau says on its web site. “Unfortunately, we don’t control most of what you receive at closing, so our page reduction efforts can only go so far. For now, we’re working on consolidating these forms and making this disclosure better.”
The consumer bureau said its combined forms could help consumers determine if the terms and costs they were quoted by a lender are indeed what they are being charged at closing. The bureau also wants to help make it easier for consumers to understand exactly what their payments will be over the life of the loan.
There’s still a long road ahead for this piece. The bureau will start testing the prototypes Tuesday in Des Moines, Iowa, engaging in conversations with consumers, lenders and brokers. The bureau said it expects to conduct four rounds of testing and revisions through February 2012. It then plans to start seeking more formal comments on draft forms in July 2012.
Posted via email from Title Insurance Posted via web from Title Insurance We are all familier with the current land title system wherein the individual States and their respective County clerks are responsible for “keeping the books” on the transfer of real estate in their respective jurisdictions. A recently introduced bill will require that HUD study a Federal Land Title System (HR 6460) sponsored by Mary Kaptur (D-OH) which would, if passed, pave the way for a National Torrens System. The Torrens System is not commonly used in the United States but is used in may parts of Europe. What is the difference between the current land title system and the Torrens System? and Why do I Care? The main difference between a common law title and a Torrens title is that a member of the general community, acting in good faith, can rely on the information on the land register as to the rights and interests of parties recorded there, and act on the basis of that information. A prospective purchaser, for example, is not required to look beyond that record. He or she does not need even to examine the Certificate of Title, the register information being paramount. This contrasts with a common-law title, which is based on the principle that a vendor cannot transfer to a purchaser a greater interest than he or she owns. As with a chain, the seller’s title is as good as “the weakest link” of the chain of title. Accordingly, if a vendor’s common-law title is defective in any way, so would be the purchaser’s title. Hence, it is incumbent on the purchaser to ensure that the vendor’s title is beyond question. This may involve both inquiries and an examination of the “chain of title.” Posted via email from Title Insurance
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