PSI Virginia Real Estate Practice Exam

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What is the main function of standardized forms required by CFPB/TRID?

To allow creditors to customize disclosures
To improve uniformity in mortgage transactions
To increase the number of loan options available
To eliminate closing costs for consumers

The correct answer is: To improve uniformity in mortgage transactions

The primary purpose of the standardized forms required by the Consumer Financial Protection Bureau (CFPB) and the TILA-RESPA Integrated Disclosure (TRID) rule is to enhance uniformity in mortgage transactions. By requiring specific forms, the CFPB aims to create a more consistent process for consumers across the board when they are engaging in mortgage transactions. This uniformity helps consumers better understand the terms and costs associated with their mortgages, as they will encounter similar disclosures regardless of the lender they choose. Standardized forms streamline the borrowing process, reduce confusion, and give consumers a clearer picture of their obligations. This is crucial in helping consumers make informed decisions while shopping for mortgage products and understanding their rights.