Lots of horror stories emerged from the foreclosure crisis: People didn’t understand the terms of their loans, borrowers said they were blindsided by changes in fees and rates at the closing table and homebuyers complained about the level of disclosure in the mortgage process.

Since its inception in 2011, the Consumer Financial Protection Bureau has been working to make the loan process more transparent. Among the changes coming this year is the implementation of what is called the TILA-RESPA Integrated Disclosure rule, which changes the disclosure rules for mortgages.

“It’s going to change drastically for all of us,” says Erin Sheckler, president of NexTitle, a title and escrow company based in Bellevue, Washington. “It’s changing the way we’ve done business over the last several decades.”

The rule includes two new “Know Before You Owe” forms, which will replace four current forms starting Oct. 3. By introducing forms that are expected to be less confusing, the goal is to make sure consumers understand at every step along the way the terms of their loans and the fees they are paying. The new forms will be used in every mortgage transaction.

The Loan Estimate and the Closing Disclosure replace four existing forms: the Good Faith Estimate and the initial Truth-in-Lending disclosure provided when you apply for a loan, and the HUD-1 Settlement Statement and the final Truth-in-Lending form issued just before closing.

“The forms are fantastic. They are just awesome,” says Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage” and a mortgage professional in the San Francisco Bay Area. “They’re not perfect, but they’re really good.” Plus, since the forms are standard, they will make it easier to compare rates and fees while shopping for a mortgage.

The Loan Estimate form includes the interest rate, the fees for both lender and third-party services such as appraisals and title insurance, estimated closing costs and whether the borrower has the right to shop for services like title insurance. It also lists any prepayment penalties or future expected changes in interest rates. Lenders will be required to provide this form within three days of a loan application.

The Closing Disclosure includes the final figures for closing costs, prepaid taxes and insurance, payments, fees and mortgage terms, plus what costs are being paid by buyer and seller and, for the first time, how much is paid to each real estate company involved in the transaction.

“It should make it a lot easier to understand what fee they’re being charged and what moneys they have to bring to closing,” says Sylvia Gutierrez, a mortgage professional in Miami and the author of “Mortgage Matters: Demystifying the Loan Approval Maze.”

You can see examples of the new forms and compare them with the old forms at the Consumer Financial Protection Bureau website.

The new rules were scheduled to go into effect Aug. 1, but they have been delayed about two months to give the industry time to prepare for the changes and make sure all the systems are in place. While the forms have been widely praised, mortgage originators and real estate agents fear the new rules will delay the closing process, especially when they first go into effect. The National Association of Realtors has advised its members to add 15 days to contracts.

“It’s requiring a fundamental change in how we process loans,” Gutierrez says. “It’s a great thing for the consumer. It’s a challenge for the industry.”

That’s partly because borrowers will receive the Closing Disclosure three days in advance, rather than waiting until the day of the closing to see the final figures, as they do currently. The new rules build in many protections for borrowers. If the type of loan changes, the rate changes more than one-eighth of a percent or a prepayment penalty is added, another waiting period of three business days starts after the new documents have been received. “We’re always dealing with last-minute changes at the table,” Sheckler says. “That’s no longer going to be allowed.”

At least some lenders say they are going to mail mortgage documents rather than send them electronically, which would add another three or four days to the process.

But opting for an electronic approach could shorten the process by two weeks, Sheckler estimates, noting that the law does not require lenders to use U.S. mail. “I think electronic disclosures and e-signatures are incredibly important,” she says. “There really is a more streamlined process. The rules totally allow for electronic disclosures.”

Another big change is that the closing documents now will be drawn up by lenders, rather than by closing agents. While the law doesn’t require the lender to draw up the documents, the law holds the lender accountable for errors.

Each settlement agent — usually a lawyer or title company — may deal with 100 different lenders, Sheckler says, each of whom will have its own process, which means learning multiple new systems when the new forms are introduced. Fleming notes that lenders are not allowed to use the new forms until Oct. 3, and that penalties for errors will go into effect immediately.

“There is zero tolerance throughout most of the disclosures for any error, but they’re being prepared by human beings,” he says. “It’s certainly going to create delays.”

More from U.S. News

A Complete Guide to Refinancing Your Home Mortgage

10 Ways Millennials Are Changing Homebuying

Thinking of Buying a Home? Start Saving Now

New Mortgage Rules to Ease Closing Process and Protect Borrowers originally appeared on usnews.com