Improving Consumer Mortgage Disclosures.

Intro -- IMPROVING CONSUMER MORTGAGEDISCLOSURES -- IMPROVING CONSUMER MORTGAGEDISCLOSURES -- CONTENTS -- PREFACE -- REPORTING ISSUES UNDER THE HOMEMORTGAGEDISCLOSURE ACT -- ABSTRACT -- INTRODUCTION -- BACKGROUND ON HMDA REPORTING -- REPORTING ISSUES PRIOR TO 2008 -- Redlining and Frequency of Rejection -- Risk-Based Pricing -- Reporting Requirements and Coverage -- DIFFICULTIES IDENTIFYING HIGH-PRICED LENDING ABUSES -- Lack of Credit History Information -- Reporting Problems with the APR -- Movements in Interest Rates -- RECENT MODIFICATIONS TO REGULATION C -- IMPLICATIONS FOR HOEPA LOANS -- IMPLICATIONS FOR FHA-INSURED LOANS -- IMPLICATIONS FOR FHA-INSURED LOANS -- REFERENCES -- IMPROVING CONSUMER MORTGAGE DISCLOSURES.AN EMPIRICAL ASSESSMENT OF CURRENTAND PROTOTYPE DISCLOSURE FORMS1 -- FEDERAL TRADE COMMISSION -- BUREAU OF ECONOMICS -- EXECUTIVE SUMMARY -- In-Depth Consumer Interviews -- Quantitative Consumer Testing -- Prototype Mortgage Cost Disclosures -- Results -- In-Depth Consumer Interviews -- Quantitative Consumer Testing -- CONCLUSIONS -- INTRODUCTION -- 1.1. Current Mortgage Cost Disclosures -- 1.2. Previous Studies of Mortgage Disclosures -- 1.3. A Study of Consumer Understanding of Mortgage Cost Disclosures -- CONSUMER INTERVIEW METHODOLOGY -- 2.1. Preliminary Focus Groups -- 2.2. Identification of Recent Borrowers -- 2.3. Recruitment of Respondents -- 2.4. Description of Respondents -- 2.5. Interview Procedure -- 2.6. Analysis of the Interviews -- CONSUMER INTERVIEW OBSERVATIONS -- 3.1. General Observations on the Interviews -- 3.2. Mortgage Shopping -- 3.3. RESPONDENT UNDERSTANDING OF THEIR RECENTLY OBTAINEDMORTGAGES -- 3.4. Use and Understanding of Current Disclosures -- 3.5. Reaction to the Prototype Disclosures -- CONSUMER TESTING METHODOLOGY -- 4.1. Current and Prototype Disclosure Forms -- 4.2. Test Procedure and Questions.

4.3. Loan-Cost Scenarios -- 4.4. Sample -- 4.5. Method of Analysis -- PROTOTYPE MORTGAGE COST DISCLOSURES -- 5.1. Development of the Prototype Disclosures -- 5.3. Description of the Prototype Form -- 5.4. Adjustable-Rate, Hybrid, and Payment Option Loans -- CONSUMER TESTING RESULTS -- 6.1. Aggregate Results -- 6.2. Individual Question Results 6.2.1 Overview -- Loan Amount -- Settlement Costs -- Charges for Optional Products and Services -- Total Up-Front Charges -- Interest Rate -- Annual Percentage Rate (APR) -- Cash Due at Closing -- Monthly Payment and Escrow -- Balloon Payment -- Prepayment Penalty -- CONCLUSIONS -- 7.1. Current Disclosures Failed to Convey Key Mortgage Costs to ManyConsumers -- 7.2 Prototype Disclosures Developed for the Study Significantly ImprovedConsumer Recognition of Mortgage Costs, Demonstrating that BetterDisclosures are Feasible -- 7.3. Both Prime and Subprime Borrowers Failed to Understand Key LoanTerms, and Both Benefitted from the Improved Disclosures -- 7.4. Improved Disclosures Provided the Greatest Benefit for More ComplexLoans, which Both Prime and Subprime Borrowers Had the Most DifficultyUnderstanding -- 7.5. The Importance of Consumer Testing -- APPENDIX ACONSUMER INTERVIEWS RECRUITMENTSCRIPT AND SCREENER -- FTCMORTGAGE DISCLOSURE STUDY CONSUMERINTERVIEW SCREENER -- APPENDIX BCONSUMER INTERVIEWS INTERVIEW GUIDE -- FTCMORTGAGE DISCLOSURE STUDY CONSUMERINTERVIEW GUIDE -- I. WARM-UP (2 minutes) -- II. Introductions and Mortgage Decision Process (5 Minutes) -- III. Gathering Information on the Mortgage Process (5 Minutes) -- IV. Shopping for a Loan (10 Minutes) -- V. Loan Disclosure Review (38 Minutes) -- APPENDIX CCONSUMER INTERVIEWS CURRENTDISCLOSURE FORMS -- Current Disclosure Forms Used in the Consumer Interviews -- APPENDIX DCONSUMER INTERVIEWS EXAMPLES OF RESPONDENTCOMMENTS ON SELECTED ISSUES.

Examples of Respondent Comments on Selected Issues -- Table D.1 Examples of Respondent Understanding of the GFE Discount Fee Disclosure -- Table D.2 Examples of Respondent Understanding of the TILA APR Disclosure -- Table D.3 Examples of Respondent Misunderstandings of the TILA AmountFinanced Disclosure -- Table D.4 Examples of Respondent Understanding of the TILA Finance ChargeDisclosure -- Table D.5 Examples of Respondent Reactions to the Prototype Disclosure Form -- APPENDIX ECONSUMER TESTING RECRUITMENTSCRIPT AND SCREENER -- APPENDIX FCONSUMER TESTING QUESTIONNAIRE -- APPENDIX GCONSUMER TESTING CURRENT DISCLOSURE FORMS -- Current Disclosure Forms Used in the Consumer Testing -- REFERENCES -- INDEX.

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Electronic reproduction. Ann Arbor, Michigan : ProQuest Ebook Central, 2024. Available via World Wide Web. Access may be limited to ProQuest Ebook Central affiliated libraries.