12-27-2013: Apparently, the main reason for new disclosure forms is to explain any changes in the multiple iterations (upon application, after appraisal, when rates and terms are locked, and possibly other changes) – but they haven’t improved explanations. Source: http://www.macon.com/2013/12/25/2849672/the-mortgage-professor-improved.html
You used to see the Truth In Lending (TIL) statement of gobbledygook specifying your loan details – most people’s eyes glaze over the forms and “sign here”. Now, you will get a simplified form called the “Loan Estimate” form.
You also used to see a HUD-1 closing statement, well soon you’ll see the “Closing Disclosure” form. Apparently “guaranteed” to be seen by the Buyer as early as 24 hours before closing. Ha! I’ll believe that when pigs fly first class.
Mortgages are complex transactions that may include risky features. Consumers currently receive different, but overlapping, federal disclosure forms with the terms and costs of mortgage loans. Because these forms are confusing for consumers, Congress directed us to create new forms. See the new Loan Estimate & Closing Disclosure forms here. We want you to use the new forms to inform yourself as you consider different loans.
Source: http://www.consumerfinance.gov/knowbeforeyouowe/compare/