Simplifying mortgage disclosure forms so that borrowers get a clearer picture of the costs and obligations involved will be a primary goal of the new Consumer Financial Protection Bureau and Elizabeth Warren, the consumer advocate appointed to oversee its creation. 

Warren, a Harvard law professor appointed by President Obama, has been a vocal critic of what she calls “tricks and traps” in mortgage contracts and other credit agreements that bury the essential details of a loan or credit card agreement in mountains of text.

Obscured by fine print

“Fine print obscures the cost of credit and makes it impossible for families to compare products,” Warren said, opening a forum on simplifying mortgage forms. “Too often, families come to understand the legalese only when they get bitten by it. Streamlined disclosure can level the playing field and give families better tools to make better choices.”

Warren said this was particularly true with mortgages, where “borrowers receive stacks of incomprehensible paperwork when they’re looking for a loan.”

The forum, held Tuesday in Washington, D.C., was designed to seek imput on how mortgage disclosure forms might be simplified. Participants included consumer advocacy groups, housing counselors, financial literacy experts, mortgage companies, and other stakeholders. Future stakeholder meetings are planned to help refine the document design.

Combining two mortgage disclosures into one