Treasury Secretary Tim Geithner and Elizabeth Warren, the newly appointed head of the Consumer Financial Protection Bureau, met with advocacy groups Tuesday to discuss how the mortgage-application process may be improved.
At the core of the Treasury and the CFPB's reform efforts are the disclosure documents that accompany mortgage loans. Too often, they are virtually inscrutable for the average consumer – something that young mortgagees may know all too well.
Mortgage borrowers, Warren said, "receive stacks of incomprehensible paperwork when they're looking for a loan."
By streamlining mortgage-disclosure documents, the Treasury and the CFPB – which was created only recently, thanks to the financial reform bill that was enacted earlier this year – hope to make it easier for Americans to apply for a mortgage.
Drafting "one clear, easy-to-understand document is a high priority for the CFPB," the two agencies said.
The reform bill requires that a new mortgage-disclosure template be prepared by mid-2012, but the Treasury and the CFPB expect to create a draft well in advance of that deadline. When the new mortgage documentation is introduced – which probably won't happen for a few years – mortgagees of all ages will benefit.