Consumer Reaction to Advance Disclosure of Settlement Costs. A Staff Study

摘要

Findings are reported from a survey focusing on consumer experience with the advance disclosure procedures of the Real Estate Settlement Procedures Act (1974). The survey, undertaken informally by telephone, reached 90 respondents in 10 regions and 29 States, including the District of Columbia. A total of 76 percent of respondents recalled receiving a settlement booklet, and of these, 84 percent read it; 96 percent of the respondents recalled receiving an advance disclosure form, and of these, 99 percent read it. A total of 25 percent of the respondents used advance disclosure information to shop for or negotiate cost reductions in settlement services; nearly 85 percent found the advance disclosure estimate of settlement costs to be the same as or within 5 percent of the actual closing expenses. Many respondents reported that knowing the approximate (in many cases exact) amount of money needed for closing was reassuring and helpful. Consumers with prior home buying experience were divided on the benefits of advance disclosure, with many commenting that it would be most helpful for the first - time buyer. A total of 10 percent of the respondents attributed the long time period between loan commitment and closing day to the 12 - day minimum waiting period. Five of these nine consumers experienced inconvenience and incurred expense due to the waiting period. Recent administrative changes liberalizing and simplifying the waiver of the 12 - day minimum waiting period appear to have substantially reduced the possibility of delay, inconvenience, and expense exhibited by the five study cases. Lists of States and respondents are appended, along with the survey instrument. Tabular data are provided. (Author abstract modified).