The latest wave in the tsunami of rulemakings from the CFPB is the pending integrated disclosure rule under the Truth in Lending Act and the Real Estate Settlement Procedures Act. And just the timing aspects related to providing the consumer the loan estimate and the closing disclosure could cause havoc, a top industry attorney warned recently. According to Phillip Schulman, a partner in the Washington, DC, office of the K&L Gates law firm, the biggest problem with the TILA/RESPA Integrated Disclosure (TRID) rule has to do with the timing requirements. “You have to give the loan estimate to the borrower within three business days of receiving the application, and no sooner than seven days before consummation or closing of the ...

The pending TILA/RESPA Integrated Disclosure (TRID) rule from the CFPB is going to raise the risk of losses for investors in U.S. residential mortgage-backed securities, according to a new report from Moody’s Investors Service. Currently, as Moody’s points out, RMBS trusts are liable for lender errors in calculating the finance charge, the annual percentage rate (APR) and certain other disclosures required by the Truth in Lending Act. However, they are not liable for errors on itemized settlement charges and other disclosures required by the Real Estate Settlement Procedures Act. Further, under the current regime, TILA and RESPA each require lenders to deliver both an initial and a final disclosure to consumers. “Whether an assignee can be liable for lender errors ...

The CFPB plans to release its long-awaited final rule to implement Dodd-Frank Act amendments to the Home Mortgage Disclosure Act in late summer, according to the bureau’s Spring 2015 rulemaking agenda, which was released late last month. “The proposal would help align the law with existing industry standards for collecting data on mortgage loans and applications,” said the agency. “It would also improve HMDA’s effectiveness through changes to institutional and transactional coverage, modifications of reporting requirements, and clarifications of existing regulatory provisions. We expect to release a final rule in late summer.” Elsewhere, the CFPB continues to be steadfast on the Aug. 1, 2015, effective date for its TILA/ RESPA integrated disclosure rule, and its latest rulemaking agenda betrays no ...

A dramatic disconnect has surfaced between different segments of the mortgage industry when it comes to being prepared to comply with the Consumer Financial Protection Bureau’s pending integrated-disclosure rule. Professionals in the land title insurance side of the business are far more confident about their readiness than are depository institutions, recent surveys reveal. A survey conducted in April by the American Land Title Association found that 92 percent of respondents indicated their company will be prepared to implement the new loan estimate and closing disclosures and to comply with the CFPB’s regulation. That number isn’t as good as it seems, though. A much smaller 62.6 percent said they are on schedule for implementation. Another 29.4 percent conceded they are behind ...

If one of the sponsors of the Dodd-Frank Act supports giving mortgage lenders an enforcement break when the CFPB’s integrated disclosure rule kicks in later this year, you know something serious is afoot. Such is indeed the case. Rep. Brad Sherman, D-CA, one of the original backers of Dodd-Frank, has crossed the partisan aisle in the House Financial Services Committee to join Rep. Steve Pearce, R-NM, in introducing H.R. 2213. Their bill would grant lenders a temporary safe harbor from enforcement of the rule integrating the required mortgage disclosures under the Truth in Lending Act and the Real Estate Settlement Procedures Act. More specifically, H.R. 2213 would protect lenders from private lawsuits and regulatory enforcement actions through Dec. 31, 2015, ...

CFPB Director Richard Cordray continues to appear steadfast in his refusal to accommodate the mortgage industry by providing some sort of soft enforcement period for the new integrated disclosure rule, which is set to kick in Aug. 1, 2015. In a recent letter to Rep. Blaine Luetkemeyer, R-MO, one of the members of Congress who has been pressing the director for some kind of an enforcement grace period, Cordray was too discreet to come right out and say “no” to members of Congress. Instead, he told the congressman that the bureau shares his desire for “a smooth and successful implementation of the integrated disclosure rule, and we continue to work closely with all stakeholders to support that goal.” Cordray then ...

CFPB Director Richard Cordray tried to reassure attendees at the National Association of Realtors’ trade expo last week that the impact of the bureau’s pending integrated disclosure rule isn’t going to be as dramatic as many fear – particularly the concern that the three-day disclosure requirement is going to delay loan closings. “The timing of the closing date is not going to change based on any problems you discover with the home on the final walk-through, even matters that may change some of the sales terms or require seller’s credits,” Cordray said. On the contrary, the bureau “listened carefully to your concerns” and limited the reasons for closing delays to only three narrow sets of circumstances. They are: any increases to ...

The Mortgage Bankers Association continues to forward to the CFPB questions and requests for clarifications on a number of issues related to the bureau’s integrated disclosure rule that have yet to be adequately addressed, such as changes to the Closing Disclosure (CD) after scheduled closing. “There are limited options under the rule, in the event a lender has provided a closing disclosure and closing is delayed for unforeseen circumstances outside the lender’s and/or the borrower’s control,” said the MBA in correspondence to the bureau. Similarly, there may be borrower and seller changes to the purchase terms. “Under the current rule and commentary, the lender apparently has no ability to provide a revised Loan Estimate (LE) or CD and re-compute the ...

Most of the mortgage industry cannot reliably confirm whether it will be ready to fully comply with the CFPB’s pending integrated disclosure rule, according to a new member survey by the American Bankers Association. Based on approximately 800 responses from bankers nationwide, “Our survey reveals that an overwhelming 74 percent of banks are using a vendor or consultants to assist with TRID implementation,” Bob Davis, head of mortgage markets at the ABA, said in a letter to CFPB Director Richard Cordray. Community banks in particular are highly dependent on the ability of vendors to deliver technology-related services that are critical to bank compliance efforts, according to Davis. “Interestingly, though, bankers from large institutions were over-represented in the survey, which implies ...

Contrary to other segments of the mortgage industry, a huge majority of title professionals will be ready to play ball when the CFPB’s TILA/RESPA integrated disclosure rule goes live Aug. 1, 2015, according to a survey conducted by the American Land Title Association. “Ninety-two percent of our survey respondents indicated their company will be prepared to implement the new forms and comply with the CFPB’s regulation,” said Michelle Korsmo, ALTA’s chief executive officer. “The land title insurance industry has been a leader in preparing the real estate industry for the new disclosures and that is reflected in the preparedness of our members.” However, perhaps not so surprisingly, collaboration with lenders and real estate agents, and potential closing delays top the ...