Home Finance Disclosure Bills Find Backing

Consumers Union, the nonprofit publisher of Consumer Reports magazine, has come out in support of state Senate Bills 1120 and 1124, which seek more complete disclosure to those seeking home financing.

The bills, authored by State Sen. Leroy Greene (D-Sacramento), require that mortgage lenders and mortgage brokers who do not guarantee interest rates from the time of application must:

In the case of SB 1120, disclose in advertisements that the interest rate may change and that it may not be a good indicator of future rates; and in the case of SB 1124, secure every loan applicant’s signed acknowledgment that the interest rate is not guaranteed and describe when and how the interest rate will be set.

In addition, SB 1124 requires that every mortgage lender and mortgage broker give each loan applicant a good-faith written estimate of the time likely to be required to close the loan. Mount Vernon, N.Y.-based Consumers Union has a West Coast regional office in San Francisco.