New mortgage form said required of large and small banks

by. Carter Dougherty

New U.S. rules requiring simplified mortgage paperwork will take effect in August 2015 without an exemption for small lenders, according to people briefed on plans by the Consumer Financial Protection Bureau.

The new regulation, the result of a two-and-a-half year effort to help borrowers shop around for home loans, would kick in on Aug. 1, 2015, according to one of the people, who asked to remain anonymous because it hasn’t been released. CFPB Director Richard Cordray plans to unveil the rule tomorrow at a field hearing in Boston.

Camden Fine, president of the Independent Community Bankers of America said bureau officials told him they “are not inclined” to exempt small lenders from the rule, which he called a regulatory burden.

“This rule will affect every lender, every title company, and every single borrower and property seller,” Fine said in an e-mail. “There won’t be any small creditor carve-outs on this rule at all.”

Form prototypes include information such as interest rates, monthly payments and closing costs in bold type and a less cluttered format.

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