13,000 Lessons Learned

As you might recall, the Dodd-Frank Act instructed the CFPB to replace the Truth in Lending form and the Good Faith Estimate with a single integrated mortgage disclosure. Instead of two forms that are long and complicated and contain overlapping information, our aim is to design a single form that is easier to explain and understand.

We wanted to hear from the people who would be using the new form. In May, we launched Know Before You Owe to give consumers, lenders and other stakeholders a platform to give us feedback. You responded in a big way.

Next week, we’ll be asking for input again. To get an email when we do, sign up here if you haven’t already.

To learn what your feedback from the first round of tests told us, read on.

We posted two initial versions of the new disclosure form, the “Ficus” form and the “Pecan” form. We asked users to tell us which form they thought was more effective, then to leave comments on specific elements of one of them. Altogether, we received 13,096 of these comments. More than seven thousand came through the consumer version of the feedback tool and more than five thousand through the industry version.

Thanks to everyone who submitted comments. We have spent the last several weeks reading them, and we want to share with you some of what we read.

• “These issues are things I worry about, but are usually hidden in fine print. I like that it is obvious.” We’re so glad you think so—we put a lot of time and effort into those drafts, so that was really encouraging. More than half of the comments asked us to keep something about the initial drafts we posted last month, often because it was helpful or easy to understand.
• The sections that received the most attention were Cautions, Key Loan Terms (Ficus), and Summary (Pecan), which collectively received 31% of the comments. Most of you thought these sections were useful, but you also offered thoughtful suggestions about how to make them clearer and easier to understand. Both online and in the first round of one-on-one consumer testing, a lot of people thought that the “Ficus” Key Loan Terms section was easier to follow than the “Pecan” version. But others thought it was useful to have all the Cautions in one place as they are on the “Pecan” form. We’re going to try to do both: As you’ll see next week, we’ve revised these sections in an effort to combine the most helpful aspects of each design.
• The second most talked-about part of the forms was the Projected Payments section, with 20% of comments. Many people found this section useful. For instance, one reader wrote that it “clearly states what I might be facing in the future.” However, many of you found the way we presented the information unclear, and you didn’t always agree with each other about where to put this section. Some were confused by seeing the payment information before the key loan terms; others liked it at the top because “at first glance, you can see if the closing amount and monthly payments are affordable.” We’ve used your comments to help us revise the layout.
• The Comparisons section attracted a lot of interest (8% of comments), because it would be “helpful if shopping around for loans.” But on our first attempt, the language confused many of you and our in-person testing participants. We’ve used that feedback to simplify and clarify the section.

One last note: We were delighted to get so many constructive comments. We are still thinking about how best to implement many of the suggestions we received, so just because we did not address a particular feature in this round does not mean it won’t change in future rounds.

When we launch another round of Know Before You Owe next week, you’ll see that the focus of our online tool has shifted. Last time, we asked for feedback on the whole form. This time, we are going to focus a little more closely on one aspect: how effective the form is at communicating closing costs. Closing costs are complicated, and we need your help to make sure our form deals with them in the clearest way possible.

We are committed to creating a simpler form that works for consumers and lenders. But we can only do that with your continued input.

We will have more details about the next round when we launch. Sign up to get an email alert to make sure you have your say.