WASHINGTON -- Housing Secretary Andrew Cuomo Wednesday unveiled a proposal to compel mortgage brokers to detail their fees more clearly and earlier in the loan process.

Cuomo said the initiative will give consumers more information with which to "hop around" for the best deals when dealing through mortgage brokers.

The changes could affect many of the approximately 3 million families who get home mortgage brokers each year.

Mortgage brokers, who act as intermediaries between lenders and consumers and sometimes receive a fee from the credit institution, handled about $333 billion in mortgage transactions last year - about half of all mortgage transactions, according to the Department of Housing and Urban Development (HUD).

Current rules already require some degree of disclosure by brokers - but only at settlement when it's too late for most consumers to back out and the disclosure gets lost in other paperwork.

"The Department of Housing and Urban Development is acting to protect consumers and fundamentally change the way many Americans borrow to buy homes," Cuomo said at a press conference held to discuss the move.

The proposed rule requires brokers to sign a one-page standardized contract disclosing how much they are compensated by lenders for booking a new transaction and whose interest they represent - the lender or the borrower.

In the event that no disclosure is signed, an infraction of the Real Estate Settlement Procedures Act (RESPA) would be assumed and imply potential liability under RESPA for charging excessive fees. A RESPA violation carries a penalty of up to a $10,000 fine, a year in prison and civil liability including triple damages.

The proposed disclosure would be signed before a borrower applies for the loan. The proposed rule goes into effect after a 15-day review by Congress and an opportunity for public comment.

Consumer groups endorsed the plan, but one group said the nascent brokerage business requires more reform.

"HUD's proposal will help end the bait and switch tactics that can cost consumers dearly when they try to finance their home through an unscrupulous mortgage broker," said Michelle Meier, Counsel for Government Affairs with Consumers Union, the publisher of Consumer Reports Magazine.

The American Association of Retired Persons endorsed the measure, but called it only a good beginning. "The scope of the proposal is somewhat limited, but it's a good first step," said Eugene Lehrmann, a member of AARP's Executive Committee.

Lehrmann said he hadn't reviewed the entire text of the proposal. There was no immediate comment from other groups affected by the proposal, such as the National Association of Mortgage Brokers.

Because of the large amounts typically involved, mortgage fees can wind up costing consumers a lot of money if they are overcharged. For example, a half-point increase in the mortgage rate to 8% from 7.5% because of hidden fees could cost an extra $1,244 over 30 years for each $10,000 borrowed. Such an increase on a $150,000 loan would cost an extra $18,660 over 30 years, HUD said.

A mortgage broker industry group was quick to condemn the new proposal, arguing HUD was turning RESPA into a rate-setting tool by requiring brokers to commit to a level of compensation before the loan application is made.