The Consumer Financial Protection Bureau aims to safeguard borrowers from risky mortgages. Just this Monday, the CFPB, the government’s consumer watchdog, made a proposal that includes, but is not limited to, these provisions:
- Ban on balloon payments
- Prohibition of prepayment fees or fees for modifying or deferring loans
- Cap on late fees
- Requirement for borrowers to receive homeownership counseling prior to signing mortgage papers
Additionally, new versions of two simplified mortgage disclosure forms have been proposed. The CFPB hopes that the revisions will clarify loan terms and costs so that consumers know exactly what they’re buying into.
The CFPB invites the public to weigh in by viewing the before and after docs at www.consumerfinance.gov. Comments on the forms – Loan Estimate and Closing Disclosure – will be received until November 6.