Mortgage Forms You Can Understand? Not Quite Yet

Can consumers get a break, just once?

This week, new federal rules go into effect requiring mortgage lenders and brokers to clearly disclose to borrowers the actual costs of their mortgages, including interest rates, fees and penalties. Every borrower must now receive a standard, government-approved Good Faith Estimate, a form that's written in plain English and provides an insta-tutorial on how to comparison-shop for a loan. If a mortgage contains certain potentially radioactive features of the kind that set bubble borrowers up to fail - including adjustable rates, negative equity, prepayment penalties and balloon payments – the lender has to explicitly disclose it.

In addition, for the first time, you must be told if your mortgage broker received a fee, known as a yield spread premium, in exchange for setting you up with a higher interest rate.

Score one for the consumer, right? Not so fast. HUD has agreed to delay enforcement of the Good Faith Estimate and other elements of the new rules, under the Real Estate Settlement and Procedures Act (RESPA), until April 1. Mortgage industry lobbyists pressed HUD for the delay, asserting lenders and brokers needed more time to gear up.