Back at Seeking Alpha, Felix Salmon picked up a great article on Secretary Henry Paulson who decries there needs to be more transparency in loan documents.

“Recent surveys have shown that as many as 50 percent of the borrowers who have gone into foreclosure never had a prior discussion with a mortgage counselor or their servicer. That must change.” I hear you.

“We need simple, clear, and understandable mortgage disclosure. We must identify what information is most critical for borrowers to have so that they can make informed decisions. At closing, homebuyers get writer’s cramp from initialing pages and pages of unintelligible and mostly unread boilerplate that appears to be designed to insulate the originator or lender from liability rather than to provide useful information to the borrower. ” It’s refreshing to hear someone finally putting it out there: “It’s too convoluted, how can Joe Schmoe understand it all?”. Well, you get it.

“The most critical facts, including potential future monthly payments, should be on a single page in clear, easy-to-understand language, to be signed by the borrower and the lender. ” This is by far the best part of the presentation. Yes, one single page that recaps everything. That’s all people need.

I beleive ultimately the lending industry will change radically the next few months. Let’s hope things become less convoluted.