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The CFPB has announced the second phase of its Know Before You Owe mortgage project, which will combine the two forms consumers get before finalizing a home loan into a single, easy-to-understand mortgage closing document. The CFPB is asking for public feedback on two alternative prototypes, which are designed to clearly explain the final details of the loan and closing costs.

Current federal law says that at or before closing on a mortgage loan, borrowers generally must be given two documents – the federal Truth in Lending Disclosure and the HUD-1 Settlement Statement. The CFPB is now combining these two forms. The CFPB is also consolidating other new and current federal mortgage disclosure requirements – boiling down unnecessary paperwork by as much as 50 percent.  The mortgage closing document prototypes build upon the feedback received in the first phase of the Know Before You Owe mortgage project, which focused on the loan estimates consumers receive shortly after they apply for a mortgage.

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