The U.S. Department of Housing and Urban Development announced that proposed changes to Real Estate Settlement Procedures Act disclosures will help borrowers more easily understand loan terms and loan costs. The agency said its own economic analysis determined that the average borrower is expected to save $700 if the changes are implemented. The revisions would require lenders and brokers to provide a standard Good Faith Estimate that detail the interest rate and monthly payment -- as well as any possible increases, and whether there is a prepayment penalty or balloon payment. In addition, closing costs would be consolidated into major categories to prevent junk fees, and total estimated settlement charges would be displayed prominently on the first page for easy comparison shopping.
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