(March 23 – 14:45 ET) – Canada’s banks are endeavouring to help Canadians buy a home by simplifying the language in residential mortgage documents, says the Canadian bankers Association. As part of this commitment, the CBA released a sample plain language Cost of Borrowing Disclosure Statement which is a model for statements that will be used by Canada’s banks.
Each bank will develop and put into use its own plain language Disclosure Statement by the end of the year. The Disclosure Statement is provided to consumers when the mortgage is approved to explain the terms of the mortgage, any additional costs, and the conditions for paying the mortgage off early. The sample disclosure statement also includes a simple formula which customers can follow to estimate how much it will cost them to pay their mortgages off early.
“For most people, buying a home is the biggest investment they ever make, and the mortgage documents the most complex,” says Raymond Protti, CBA’s president and CEO. “We are pleased to be able to assist our customers in making informed choices about shopping for a mortgage.”
Each bank will conduct a plain language audit of its mortgage documents and develop a strategic plan for “translating” documents that do not reflect plain language principles. The process involves translating almost 100 documents at each bank covering many different mortgage products and differing provincial regulations. Customers will see examples of the banks’ plain language commitment with the disclosure statement later this year, says the CBA.
-IE Staff