Ineffective in Any Form: How Confirmation Bias and Distractions Undermine Improved Home-Loan Disclosures, 122 Yale L.J. Online 377 (2013)

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This Essay examines three experiments that tracked eye fixations as participants reviewed home-loan disclosure forms. The experiments revealed confirmation biases in which participants read to confirm what they were told (e.g., “Your loan is at 4%”) and then failed to look for contradictory evidence such as rate adjustments. Improved forms reduced confirmation biases, but that improvement was undermined when the experimenter engaged participants in distracting conversation. These results demonstrate that improving disclosure forms cannot sufficiently protect consumers. They also suggest that mortgage counseling is necessary for many borrowers.