Effective October 10, 2017, the federal mortgage disclosure requirements under the Real Estate Settlement Procedures Act and the Truth in Lending Act that are implemented in Regulation Z will be changed to clarify technical amendments.
The rule, announced Friday, August 11, will also create tolerances for the total of payments, adjusts a partial exemption predominantly for housing finance agencies and non-profits, extends coverage of TILA-RESPA integrated disclosure requirements, and provides guidance on sharing the integrated disclosures with various parties involved in the mortgage origination process. Though it goes into effect October 10, mandatory compliance begins October 1, 2018.
Federal law has required lenders to issue two overlapping sets of disclosures to mortgage applicants for the last 30 years. In October 2015, integrated disclosures were issued by the Consumer Financial Protection Bureau (CFPB) to be in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act. Since then, the CFPB has worked to implement the change through compliance guides, webinars, and other implementation aids. Additionally, they proposed amendments to the integrated disclosure requirements on July 28, 2016.
Now, the CFPB is issuing the final rule to memorialize past guidance and make additional refinements and amendments. The final rule will create tolerances for the total of payments, adjust a partial exemption that mainly affects housing finance agencies and nonprofits, provide a uniform rule regarding application of the integrated disclosure requirements to cooperative units, and provide guidance on sharing disclosure with various parties involved in the mortgage origination process.
“For the reasons discussed in the section-by-section analysis of § 1026.19(e)(4)(ii). . ., the Bureau is not finalizing proposed comment 19(e)(4)(ii)-2, which related to comparing charges paid by or imposed on the consumer to charges disclosed on a corrected Closing Disclosure to determine if an estimated charge was disclosed in good faith,” the rule states. “The Bureau is issuing a new proposal, concurrent with this final rule, that would address this issue.”
To view the full rule, click here.