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It’s official: The Consumer Financial Protection Bureau (CFPB) has finalized updates to the TILA-RESPA Integrated Disclosure rule (TRID), also known as the “Know Before You Owe” rule, with amendments that the agency said were “intended to formalize guidance in the rule, and provide greater clarity and certainty.”
Although TRID took effect on Oct. 3, 2015, the updates addressed issues including tolerances for the total of payments, housing assistance lending, privacy and information sharing, and update coverage to include cooperative units. The CFPB is also releasing a limited follow-up proposal to address an additional implementation issue on how a creditor may provide separate disclosure forms to the consumer and the seller.
“A mortgage is one of the largest financial decisions a consumer will ever make, and CFPB’s rules help ensure consumers have the easy-to-understand information they need before making a decision that will significantly impact their financial lives,” said CFPB Director Richard Cordray. “Our updates will clarify parts of our mortgage disclosure rule to make for a smoother implementation process for lenders and consumers.”
Last year, a survey of 1,000 repeat homeowners by ClosingCorp found that 64 percent of respondents said it was easier getting a mortgage prior to the implementation of TRID, while 57 percent said it took more time under TRID than it did previously. A study by STRATMOR Group found that TRID changes hiked the price of loan originations by an average of $209 per loan, with lenders estimating that only about 17 percent of those costs being recovered through additional charges.
“The MBA appreciates the CFPB’s efforts in amending the Know Before You Owe rule to address several significant questions that have been raised for some time by our industry," said David H. Stevens, President & CEO of the Mortgage Bankers Association (MBA). "This is an extensive rule and we intend to review it closely with our members. We note that CFPB has proposed a new rule to deal with issues concerning needed revisions to the Closing Disclosure during the mortgage process that we will carefully review and comment on as well."
“Chalk this one up to an opportunity missed. While it made some important clarifications, the CPFB failed to address the item that confuses buyers and sellers the most at closing, the requirement that they receive incorrect information about the cost of title insurance at the closing table,” said Michelle Korsmo, Chief Executive Officer of the American Land Title Association (ALTA). “Our consumer research shows that 40 percent feel confused by the CFPB’s requirement to provide inaccurate pricing on title insurance. While the CFPB’s disclosures have helped homebuyers better understand their mortgage costs, consumers would value their disclosures more if the CFPB showed the accurate costs of title insurance instead of the incremental costs. The CFPB has an obligation to make this simple change. We strongly urge the Bureau to start the process of writing a new regulation to fix to title fee disclosure so consumers can receive accurate information about title insurance at closing.”
