CFPB to Discuss TRID Rules in July

Filed under: TRID

TRIDAccording to a recent article by Bonnie Sinnock, the Consumer Financial Protection Bureau is expected to clarify its TILA-RESPA integrated disclosure rules in July.

It has been eight months since the CFPB’s ┬áTRID, Truth in Lending Act and Real Estate Settlement Procedures Act, integrated disclosures.

One of the major questions that has continually been asked is how lenders, due diligence firms, and investors remain compliant when unexpected changes come up right before a closing.

Sinnock explains that lenders and investors would like the CFPB to clarify how they should handle a range of unexpected events that can occur after the initial Closing Disclosure but before closing, as well as errors discovered after closing.

Kara Lamphere, chief compliance office for Mid-America Mortgage said, “The hope is that [these issues] will be part of the upcoming CFPB clarifications this summer.”

Sinnock also wrote that CFPB guidance suggests Closing Disclosures can be used to address baseline changes occurring after the consumer receives the initial Closing Disclosure, but the law and CFPB staff commentary, both of which have a stronger legal standing than the written guidance, don’t specify that this is possible.

Samuel Gilford, bureau spokesman explained that the bureau is incorporating guidance it has already issued, such as through webinars and its compliance guide, into its regulation text and commentary. The CFPB is also conducting round table discussions, or “listening sessions,” with groups of stakeholders to gain insight into their concerns.

In addition, lenders often don’t want to direct third parties to provide certain services until they know the loan is going to closing and they know those services are needed, according to Sinnock. But waiting also means the lenders might not know certain costs, such as how many pages of recording documents they need to pay for, until near the closing date.

Lamphere also added that ideally, the CFPB’s proposed clarifications would also allow exceptions for more costly but unavoidable changes, such as an expired interest rate lock or an upward adjustment in a loan amount requested by the borrower.

Lenders think the language should be changed to clarify that if they do find a fee error after 30 days, they still have the opportunity to cure it within a specified period.

“It’s very clear what you do from Day 1 to Day 30. It doesn’t tell you what to do after that, and that’s where we need the clarity,” said Lamphere.

If you have any questions about the mortgage industry, please feel free to give me a call so we can discuss what is on your mind.


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