New simplified mortgage disclosure form from HUD

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A simplified mortgage disclosure form written in plain English has been rolled out by HUD just in time for the new year.

This should help reverse the longstanding trend of banks routinely cheating people with bait-and-switch mortgages at the closing table. A lender would promise one mortgage package and then show up with another more expensive one at the last minute. And this practice was entirely legal!

For years, Clark favored the American Enterprise Institute’s one-page mortgage cheat sheet and separate definition of terms as a way to help consumers understand the loan they were getting. (Editor’s note: You must be able to open up pdf files to access these.)

Now we have the new HUD-1 Settlement Statement. There’s also a comparison sheet that encourages you to shop around for a loan. Remember, comparison shopping is the best truth serum out there in the mortgage business.

Finally, there’s new disclosure about the funny business that’s gone on with title insurance in the past. In some states, you can shop the premium — but that’s a fact that a bank would likely never reveal to you.



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