Fed says mortgage disclosure rules up to new consumer agency
Improving mortgage disclosures for consumers will have to wait until July when the Consumer Financial Protection Bureau (CFPB) comes into business, the Federal Reserve Board announced yesterday.
In the face of criticism that homeowners didn't always understand the terms of mortgages they took out during the housing boom, last fall the Fed proposed enhancing disclosures to consumers under the Truth in Lending Act. The new rules would have changed disclosures for reverse mortgages, as well as restricted certain advertising and sales practices for them, as well as proposing new disclosure rules for loan modifications. The agency received more than 5,000 comments on this proposal and another related pair issued in 2009.
Now the Fed says the job is up to the new consumer protection agency, which will be overseeing the Truth in Lending Act. Under the Dodd-Frank Wall Stret Reform and Consumer Protection Act, the new office is required, within 18 months, to make a proposal to combine consumer disclosures for mortgage terms in a single form.