Alleviating consumer confusion is the primary reason disclosure rules exist. Among other pieces of legislation, the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA) require mortgage brokers and lenders to provide clients with certain disclosure forms throughout the loan process. It is likely that those forms will soon change.

The Consumer Financial Protection Bureau issued a 1,200-page proposal to integrate the disclosure forms required by TILA and RESPA. The proposal applies to most closed-end consumer mortgages and the integration would have far-reaching effects on industry operations.

“I think that the communication is going to have to become a lot more frequent and robust in order to allow brokers to produce accurate forms,” said Richard J. Andreano, Jr., A Washington, D.C.-based partner at Ballard Spahr and leader of the firm’s Mortgage Banking Group. “My guess is what will happen is that there will be lenders who still keep the current method of the broker issuing the form, but what they’ll probably do is have a lot more interaction with the broker—and perhaps even training of the broker—to make sure that they can issue a form that will be compliant.”

Mr. Andreano also said that the proposed loan estimate form could affect the makeup of the brokers’ business, as the form may reduce the number of lenders with whom the brokers can work.