Proposed changes to the TILA-RESPA integrated disclosures rule was welcomed by financial services associations, though three groups still have concerns.
On Friday, the Consumer Financial Protection Bureau released a proposal to update the Know Before You Owe Mortgage Disclosure Rule.
The disclosures, which are required under the Truth in Lending Act and the Real Estate Settlement Procedures Act, became effective in October 2015.
According to the bureau, the 293-page proposal is
intended to formalize guidance in the rule as well as provide greater clarity and certainty.
One of the proposed changes would include tolerance provisions for the total of payments. The proposal would mimic
existing tolerances for the finance charge and disclosures affected by the finance charge.
“This change would make the treatment of the total of payments disclosure consistent with what it was prior to the Know Before You Owe mortgage disclosure rule,” the CFPB said.
Eligibility for a partial exemption from the rule for certain housing assistance loans is being proposed even when
recording fees and transfer taxes are charged in connection with those transactions.
The CFPB is proposing to make TRID applicable to loans used to finance all cooperative units.
Additional commentary is being proposed by the CFPB to clarify how lenders can provide separate disclosure forms to the consumer and the seller.
“The bureau has received many questions about sharing the disclosures provided to consumers with third parties to the transaction, including the seller and real estate brokers,” the regulator stated. “The bureau understands that it is usual, accepted and appropriate for creditors and settlement agents to provide a closing disclosure to consumers, sellers and their real estate brokers or other agents.”
Written statements issued by Mortgage Bankers Association President and Chief Executive Officer David H. Stevens, American Bankers Association President and CEO Rob Nichols, and Independent Community Bankers of America President and CEO Camden R. Fine expressed appreciation for the CFPB’s efforts.
“The ‘Know Before You Owe’ rule was a massive undertaking, and these proposed changes begin the process of making needed adjustments and clarifications inherent in any large and complex rulemaking,” Nichols said. “While we don’t anticipate that this proposal will address all of our concerns — and are certain others will arise — we do appreciate the good faith effort made by Director Cordray and the CFPB to begin a process for ensuring an improved rule that will benefit all participants in the loan process”
Dan Berger, president and CEO of the National Association of Federal Credit Unions, also said his group is appreciative of the CFPB’s revisiting TRID and noted that there are some positive components that NAFCU advocated including
the codification of its informal compliance guidance.
“However, the bureau has not gone nearly far enough to address the numerous substantive compliance issues that have been highlighted by credit unions,” Berger stated. “Although our compliance experts will continue to analyze the proposal to identify its full impact, NAFCU believes this should be the first step in a process to create a mortgage disclosure rule that is workable for financial institutions and benefits consumers.”
While the American Land Title Association is appreciative of the effort, ALTA CEO Michelle Korsmo continued to express disagreement with the CFPB’s inaccurate disclosure of title insurance fees on the mortgage disclosures, noting, “ALTA and our members have sent over 3,000 communications to the bureau staff explaining that its required calculation for title insurance fees is not accurate and is inconsistent with the bureau’s mission to better inform consumers.”
Comments are being accepted on the proposal until Oct. 18.
