Obama backs uniform loan disclosure.

The Obama administration today released details of plans to combat "the worst abuses in mortgage markets" by creating a new Consumer Financial Protection Agency to safeguard consumers from deceptive practices and provide them with concise information for comparing mortgages and other loans.

The agency would have the power to set standards protecting consumers and encouraging competition, and the authority to make sure consumer-protection regulations "are written fairly and enforced vigorously," the Treasury Department said in a press release.

So now we have another piece of paper to sign during loan application. I thought computers were supposed to reduce paper usage. And easier, not sure if that will be the case.

The Good Faith Estimate and Truth In Lending forms in use today are not difficult, if your lender educates you. You know me, my job is to educate you to save you money. Well, if all lenders would stop the "banking mystique" and teach their customers about the loan process none of this would be necessary. Without guidance and education provided to borrowers no form written by attorneys and politicians will be easier, borrowers still will not understand!

There are just too many details to a transaction, even experienced investors still stumble once in a while. It is our job as loan originators to teach the public, help them understand the process, period! No new or old form will be easy enough for the average borrower to understand without explanation.

If you are taught how to use the existing forms, the GFE and TIL, you can do all the comparing you need. It's so, so simple. All you have to do is compare APR's. The APR (annual percentage rate) represents your interest rate combined with your closing costs. So when you call a lender for information do not ask them for today's interest rate, simply ask them for your APR. If one lender quotes an APR of 5.456% and another quotes 5.678% you automatically know the second quote is more expensive. Then, very important, you do your shopping for your loan all in the same day as tomorrow the rates may change and get it in writing. This way you are comparing apples to apples and reduce chances of closing surprises. 

This new form will certainly contain an APR, so the easiest way to shop for the best price will not change. Call your lender for your APR - it's just that easy.