"Know Before You Owe" Changes Still Pending: CFPB Proposals to Clarify TRID Disclosures
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"Know Before You Owe" Changes Still Pending: CFPB Proposals to Clarify TRID Disclosures (MLC675R)
CFPB’s Proposed Amendment to TRID Disclosures and How it Will Impact Lenders
Mortgage lenders continue to fear violating the disclosure requirements of the TILA-RESPA Integrated Disclosure Rule (“TRID” or “Rule”). While the Consumer Financial Protection Bureau (“CFPB”) provided informal guidance on certain issues prior to the October 2015 effective date of the Rule, ambiguities in the Rule remain that impact accurate delivery of the Loan Estimate (“LE”) and Closing Disclosure (“CD”) in connection with applications for closed-end, real estate-secured mortgage loans. The CFPB recognized that regulatory amendments were necessary to memorialize this informal guidance regarding the LE and CD to reduce the risk to lenders of TRID violations.
On July 29, 2016, the CFPB issued a Notice of Proposed Rulemaking (“NPRM”) to propose a number of amendments to TRID that would formalize certain of its informal guidance and make other technical changes to the Rule. The NPRM does not touch on every issue that industry participants have raised, but it is a step in the right direction, indicating that the CFPB is sensitive to some of the challenges created by the Rule. For instance, the NPRM would (1) extend TRID to loans secured by cooperative units in all states; (2) close the “black hole” that prevents lenders from resetting tolerance limits after a CD has been provided to the borrower; and (3) extend existing finance charge tolerances to the Total of Payments disclosure.
Although lenders had hoped the NPRM would address their general ability to cure TRID errors and reduce liability, many of the CFPB proposals should provide some relief to lenders. Mortgage industry participants continue to anxiously await the CFPB’s final regulations to implement these proposed changes.
This webinar with Holly Spencer Bunting will provide you a working knowledge of the significant proposals in the NPRM, how those proposals could improve upon the challenges that lenders currently face in providing accurate LEs and CDs to consumers, and will provide you familiarity with other significant issues that are not addressed in the CFPB proposal.
How the CFPB is addressing the “black hole” for resetting tolerances
Proposed clarification regarding the sharing of borrower and seller Closing Disclosures with parties to the transaction
Updated proposed guidance on completion of the disclosures for construction-to-permanent mortgage loans
Proposed changes to tolerances applicable to closing costs where a written list of settlement service providers is required
A summary of proposed changes to certain disclosures on the CFPB’s Loan Estimate (LE) and Closing Disclosure (CD) forms, including changes to the Cash to Close table and the disclosure of rounded numbers and percentages
Whether the CFPB addresses cures for disclosure errors and resulting lender liability
Whether the CFPB is proposing to change the disclosure of title insurance premiums for simultaneously issued policies
A summary of other significant clarifications to address ambiguities and resulting challenges under TRID
Disclaimer: This webinar covers the CFPB’s proposed regulations. Should the CFPB finalize the proposed regulations before the webinar date, this presentation will shift to a discussion of the content of the final regulations, rather than the content of the proposed regulations.
Holly Spencer Bunting is a partner in Mayer Brown’s Washington, DC office and a member of its Consumer Financial Services group. She practices in the areas of residential mortgage banking and consumer finance and concentrates on issues of federal and state regulatory compliance and enforcement...
Disclaimer: The content herein does not represent any association between CFPB and Eli Financial LLC. CFPB neither endorses any product of Eli Financial LLC nor warrants accuracy of the content hereto.