Mortgage, closing disclosures often failing to help buyers

Financing and closing on a home purchase can be complicated. That is why more than a year ago, the Consumer Financial Protection Bureau issued a set of rules to bring greater clarity to the process.

How’s that going for consumers? Maybe not so well, according to a survey of 1,000 first-time and repeat purchasers. Sponsored by ClosingCorp, an industry technology firm, and conducted by Wilson Perkins Allen Opinion Research, the study found that more than 50 percent of buyers were “surprised” by the amounts they were charged at closing.

Buyers told researchers that 52 percent of lenders were “off” on the fees required to obtain and close on the loan. Fifty-eight percent of buyers said their initial loan estimates had been revised before closing; 35 percent said total fees were higher than they expected.

Just 31 percent of buyers reported that there were no surprises at closing.

A stunning 17 percent said they were not even aware that closing costs were required. That shouldn’t happen with the consumer bureau’s two disclosure forms. They are:

■ The Loan Estimate, which lists information an applicant needs to understand a mortgage quote: principal and interest payments, mortgage insurance premiums, taxes, hazard insurance premiums, closing costs, record fees, homeowner association fees and the amount of cash the borrower will need to close.

■ The Closing Disclosure, which itemizes final settlement charges and must be delivered no later than three business days before closing.

Rules allow for some changes by the lender, but at the end of the process, the charges in the Loan Estimate should match the closing costs.

Sam Gilford, a spokesman for the consumer’s bureau, said the “survey results show that lenders and closing agents can do more.”