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Daily Real Estate News  |  June 21, 2007  |   Bill Brings Clarity to Complex Mortgage Disclosures
A bill in the works by Reps. Patrick McHenry (R-N.C.) and Al Green (D-Texas), both members of the House Financial Services Committee, would make changes to the Real Estate Settlement Procedures Act in order to simplify mortgage disclosures.

Under the proposal, lenders would have to provide a one-page disclosure form to borrowers, replacing documents currently in use that McHenry deems "increasingly complex, convoluted, and cumbersome."

Based on a form created by American Enterprises Institute resident fellow Alex Pollock, lenders would have to spell out the introductory interest rate, the fully indexed rate, the "maximum possible" rate, prepayment penalties and their triggers, and balloon payment amounts and due dates. Due to borrowers three days prior to closing, McHenry believes the form is a suitable alternative to banning loan practices.

Source: American Banker, Joe Adler (06/18/07)

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