On Jan. 20, 2015, the Consumer Financial Protection Bureau (CFPB) finalized minor amendments to the TILA-RESPA Integrated Disclosure (TRID) rule, dubbed the “Know Before You Owe” mortgage rules.
These minor “tweaks” to the rule address the requirement for providing revised disclosures when a consumer locks a floating interest rate, additional spacing for language regarding construction loans that may take more than 60 days to settle, the provision for the placement of the NMLSR ID on the disclosures, and other non-substantive corrections such as minor wording changes and regulatory clarifications.
The amended rule requires creditors to issue revised disclosures within three business days of a borrower’s election to lock a floating interest rate. Before this amendment, the rule would have required creditors to provide revised disclosures on the same day the borrower opted to lock a floating interest rate. In October 2014, the CFPB issued a proposed rule that would have extended this timeline to the next business day rather than the same business day. However, the amended rule recognizes the logistical difficulties a same-day requirement would present to creditors, including possible restrictions as to when a borrower would be able to lock a loan so as to allow sufficient time in the day to provide revised disclosures. Creditors are currently required to issue a revised Good Faith Estimate (GFE) within three days of locking a floating interest rate, so this amendment provides consistency with current requirements for providing revised disclosures.
Additional amendments to the TRID rule identify a particular location on the Loan Estimate form where creditors could include language informing consumers that they may receive a revised Loan Estimate for a construction loan that is expected to take more than 60 days to settle. The existing rule allows creditors to issue a revised disclosure prior to 60 days before consummation if the original Loan Estimate clearly and conspicuously states that a revised disclosure could be provided. The amended rule provides that the placement of such language regarding a revised disclosure included under the master heading “Additional Information About This Loan” and the heading “Other Considerations” would satisfy the “clear and conspicuous” standard.
Finally, in addition to some minor word-changing and clarifications to regulatory text, including correction of some regulatory cross-references, the revisions include an amendment to a previously reserved section of the 2013 Loan Originator Final Rule to require placement of the loan originator’s NMLSR ID on the Loan Estimate and Closing Disclosure.
Gavin T. Ales is chief compliance officer with Torrance, Calif.-based DocMagic Inc. He may be reached by phone at (800) 649-1362, ext. 6446 or e-mail [email protected].
This article originally appeared in the February 2015 print edition of National Mortgage Professional Magazine.
