Alert October 16, 2012

FTC Comments on CFPB’s Proposed Mortgage Disclosure Forms

The FTC submitted a comment in response to the CFPB’s notice of proposed rulemaking requesting comments to its proposal to combine certain disclosures consumers receive in connection with applying for and closing on a home mortgage loan under TILA and RESPA (see July 10, 2012 Alert). The FTC’s comment commended the CFPB’s efforts and stated that the disclosures likely will improve the information that consumers receive. The comment suggests that the CFPB conduct controlled quantitative testing before finalizing the rule to ensure that key mortgage terms are not misinterpreted or misunderstood. In its press release announcing the comment, the FTC noted that in its own 2007 study, it found that mortgage terms and costs were not adequately conveyed to consumers.