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The Bureau has released a second guide regarding the new Loan Estimate and Closing Disclosure forms. These forms will replace the Good Faith Estimate, Truth-in-Lending statement and the HUD-1 settlement statement on August 1, 2015. This guide contains numerous examples, and can help mortgage lenders and settlement companies of any size gain a better understanding of the new forms.
The Consumer Financial Protection Bureau has released the TILA-RESPA Integrated Disclosure Rule Small Entity Compliance Guide, a welcome 89-page FAQ-style overview. The guide covers the main points mortgage lenders and settlement providers need to implement Loan Estimate and Closing Disclosure forms, which will replace the Good Faith Estimate, Truth-in-Lending disclosure and HUD-1 for most loans beginning August 1, 2015. While the guide is specifically aimed at aiding small entities, most of the information applies to companies of any size.
Of special interest is the last section, “Practical implementation and compliance issues,” discussing considerations for technology changes, data standards such as MISMO, and collaboration with settlement providers. This section makes one of the most important points: “Consider the training that will be necessary for your loan officer, processor, closing, compliance, and quality control staff, as well as anyone else who accepts applications, processes loans, or monitors transaction compliance.” Stewart continues to provide training forums on this topic at our offices throughout the country, which are also available via webinar.
In November 2013, the Consumer Financial Protection Bureau (CFPB) finalized the integrated disclosures rule to replace the Truth In Lending (TILA) and Good Faith Estimate (GFE) forms for closed-end mortgages. The effective date for these new disclosures forms is August 1, 2015.
Lenders, title and settlement service providers, technology system providers and others within the residential real estate industry are busy preparing for these new disclosures. With that in mind, Wells Fargo recently announced its support of the American Land Title Association's Best Practices.
The American Land Title Association (ALTA) hosted a webinar following the CFPB's release of the final rule on integrated mortgage disclosures, and the impact on the industry, titled "A New Era in Closings." View the recorded webinar on ALTA's blog.
The Consumer Financial Protection Bureau (CFPB) released its final rule on the replacement of the current consumer disclosure forms required under RESPA and the Truth-in-Lending Act (TILA). The new, integrated Loan Estimate Form and Closing Disclosure Form go into effect August 1, 2015.
ALTA publicly released the latest updates to the “Title Insurance and Settlement Company Best Practices” Framework.
This new release includes:
The senate on Tuesday confirmed Richard Cordray to head the Consumer Financial Protection Bureau, ending years of contentious political wrangling over the leadership of one of the most influential agencies in Washington. Read More.
The Consumer Financial Protection Bureau (CFPB) finalized what is arguably the new regulator's most consequential rule on Jan. 10. The agency's ability-to-repay (ATR)/qualified mortgage (QM) rule amended Regulation Z to require creditors to make a reasonable, good faith determination of a consumer's ability to repay any consumer credit transaction secured by a dwelling. Stewart has partnered with Dodd Frank Update to sponsor a comprehensive special report on the topic. Download the full report.
The CFPB’s semi-annual regulatory agenda of its rulemaking activities posted on July 3, 2013 indicates we may not see the Final Rule on the Integrated RESPA/TILA closing disclosures until sometime in October 2013. Earlier thoughts had been that the Final Rule would be issued in August or September. Kelly Cochran, CFPB assistant director for regulations, also wrote on the CFPB blog that “we would not expect any implementation work to begin until after the January 2014 effective date for the earlier mortgage rules.” We’ll be watching activity closely and will keep you updated.
CFPB released its procedures for bank examination to help lenders better understand what the Bureau will be looking for when it comes to the following:
The CFPB’s searchable complaint database went live on May 31, 2013. Here users can easily track, sort, search, and download complaints listed in the Consumer Complaint Database by state. Search criteria includes complaints on: Bank accounts or Services, Credit Cards, Credit Reporting, Money Transfers, Mortgage, Student Loans and other Consumer Loans. Data is refreshed nightly.
With the finalization of amendments on May 29th the CFPB looks to expedite access to credit by creating specific exemptions and modifications to the CFPB’s Ability-to-Repay rule for small creditors, community development lenders, and housing stabilization programs. The amendments also revised rules on how to calculate loan origination compensation for certain purposes.
The bureau has also postponed the June 1, 2013 start date of a Dodd-Frank Act amendment prohibiting creditors from financing certain credit insurance premiums in connection with certain mortgage loans. This pushback will move the start date to January 10, 2014 to allow the CFPB time to gather more comments on the matter.
The National Association of Federal Credit Unions (NAFCU) recently released their survey findings from a recent NAFCU Economic and CU Monitor survey asking Credit Unions about the new Ability to Pay and QM rulings.
The CFPB has released a number of videos regarding the proposed new mortgage rules. Videos on the TILA Escrow Rule, the Mortgage Servicing Rules and the Loan Originator Compensation Rule can be found on the CFPB’s YouTube site. Specifically, learn more about the Ability-to-Repay and Qualified Mortgage (QM) Final Rule, which goes into effect January 10, 2014.
The CFPB has launched its Spanish language website. The website, which is optimized for mobile use, provides access to essential consumer resources, such as how to submit a consumer complaint and answers to consumers’ frequently asked questions. CFPB en Español currently features 250 Ask CFPB questions, with more to come.
“The CFPB is dedicated to being as accessible as possible for the greatest number of consumers,” said CFPB Director Richard Cordray. “CFPB en Español can be a trusted resource for Spanish-speaking consumers looking for clear information on consumer financial products and services.”
The website address is www.consumerfinance.gov/es.
On May 6, 2013, the Federal Housing Finance Agency (FHFA) announced it is going to limit both Fannie Mae and Freddie Mac to acquiring safe mortgages. The FHFA went on to say that beginning January 10, 2014, Fannie and Freddie would no longer be able to purchase loans that are interest only, a term of longer than 30 years or include points and fees in excess of 3% of the total loan amount. Adoption of these new limitations is in keeping with FHFA’s goal of gradually contracting their market footprint and protecting borrowers and taxpayers.
HousingWire recently interviewed several mortgage industry leaders following the SourceMedia Servicing Conference in Dallas, TX. Echoing sentiments from others being interviewed, Megan Johnson, a default litigator with Homeward Residential, said, "A company needs to get everybody on the same page. When you bring together all departments, everyone knows how their sections work, but no one knows how the all the pieces work together." In doing so, Johnson said companies can better avoid risk.
The CFPB has released a small entity compliance guide on the Ability to Repay and Qualified Mortgage Rule. This most recent guide explains the Ability to Repay (ATR) and Qualified Mortgage Rule(QM) requirements for lenders who originate closed-end residential mortgages. While the guide is 45 pages, it outlines in detail the ruling and offers considerations for a practical implementation approach to help lenders get started.
The housing finance sector’s long wait for one of Dodd-Frank’s most highly-anticipated final rules is at an end.
The Ability to Repay Final Rule officially issued by the Consumer Financial Protection Bureau (CFPB) on Jan.10 will establish a 43 percent debt-to-income ratio threshold for qualified mortgages (QM). However, in a surprise move, the final rule establishes a temporary category of QMs that has more flexible underwriting requirements. The Bureau said it crafted this temporary provision because it fears lenders will initially be reluctant to write loans that are not QMs, even though the loans are responsibly underwritten.
If you have a subscription to respanews.com you can also read about the qualified mortgage rule.
On Tuesday, January 8, the Consumer Financial Protection Bureau (CFPB) set a target date for the release of the Truth in Lending Act (TILA)/RESPA Mortgage Disclosure Integration. While the date shown in the Bureau’s semi-annual regulatory agenda (as published in the Federal Register) indicates a September 2013 date, CFPB director Richard Cordray said in an interview with Bloomberg they would look to release a final rule this summer*.
*January 10 Bloomberg article states rule date as third or fourth quarter.
If you have a subscription to respanews.com you can also read more about the target date.
Special Member Update via Email
ALTA Advocacy Update
Over the past few years, many challenges in the marketplace have influenced and changed the way the business of title insurance and real estate settlement are conducted. Many of these changes have prompted lenders to consolidate their business and even consider taking their settlement work in-house. ALTA’s Board of Governors is committed to promoting the vast agent and settlement network that exists today. In order to help title and settlement companies to understand what lenders, regulators and consumers are seeking in the marketplace, ALTA is pleased to announce the publication of the “Title Insurance and Settlement Company Best Practices.”
In a new turn in the title agent vetting saga, the California Department of Corporations issued a bulletin cautioning lender licensees that using the emerging agent vetting companies to pre-screen their agents may violate state law. It also warned escrow licensees that participating in an agent vetting program could violate state law. The department asked all licensees to be cautious when looking into these programs. Read on for details from the bulletin.