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Consumer Financial Protection Bureau

CFPB Unveils Latest Round of Disclosure Prototype; Turns Sights to Closing Document

October 18, 2011

The Consumer Financial Protection Bureau (CFPB) released its fifth round of draft mortgage disclosure prototypes, this time comparing a fixed-rate (Pinyon Bank) and an adjustable-rate (Yucca Bank) loan.

The CFPB said it will test this version of the disclosure with consumers and industry in Albuquerque, N.M. ALTA encourages members to provide feedback by either posting a comment to the CFPB’s ”Know Before You Owe" webpage or send an email directly to the CFPB.

Despite conversations with ALTA’s RESPA Task Force, the CFPB continues to include the word “optional” on the Owner’s Title Insurance line item. The Task Force will meet by phone Thursday, Oct. 20 to discuss concerns they have with the latest round and next steps.

So far, the Bureau has tested a disclosure that combines the Truth in Lending form and Good Faith Estimate. The CFPB has indicated it will release the first draft of a revised HUD-1 before Thanksgiving. The CFPB has called this prototype a closing disclosure. The Bureau also indicated that this isn’t the last time the application disclosure will be reviewed.

“It needs to work together with the closing disclosure, so we’ll be asking for your feedback on both in the future,” the Bureau said in a blog post.

During ALTA’s Annual Convention, the Task Force held a conference call with CFPB staff, which was seeking information on when data for different line items on the GFE and HUD-1 become available including:

• When are the premiums for insurance (homeowner's, flood, etc) known/knowable?
• When are the final numbers for all tax-related items (property tax, assessments, etc) known/knowable?
• When are items like HOA Dues known/knowable?
• When are the seller's contributions known/knowable?
• When do lenders finally choose how many months of escrow they want?

The Task Force explained how many of these costs are only known with certainty late in the process, usually after the lender prepares its final closing package. They also highlighted how differing practices across the country lead to different timings for this information in different states. The Bureau was thankful for the information and is looking to meet with the Task Force in person later this year to work through more issues.