ALTA Details Implementation Cost of CFPB’s Draft Mortgage Disclosure on Settlement Providers
|March 15, 2012|
In a letter to the Consumer Financial Protection Bureau, ALTA outlined its main concerns regarding the Bureau’s draft integrated RESPA/TILA mortgage disclosure forms, including the cost of implementation on settlement service providers.
After advising a Small Business Review Regulatory Enforcement Fairness Act (SBREFA) panel on March 6 how the new forms will impact closings and their business, Pam Day of Day Title Services in Richmond, Va.; Celia Flowers of East Texas Title Companies in Tyler, Texas; Dave Windle of Cal-Sierra Title in Quincy, Calif.; and Steve Buckman of Buckman Legal in Washington, D.C., followed up by sending a letter to Richard Cordray, CFPB’s director.
The March 13 letter highlights ALTA’s concerns regarding who will complete the Settlement Disclosure Form (SDF), the three-day rule and cost of implementation.
According to the letter, the title industry estimates that using the current versions of CFPB’s draft forms in accordance with the regulatory outline will increase costs to small business settlement providers by as much as $800 per employee in upfront implementation and training costs; $2,360 to train lenders, Realtors and other customers; a 20 percent increase in their yearly software maintenance fee; and a 20 percent decrease in annual revenue due to decreased productivity. An itemization of these costs is detailed in Exhibit “A” of the letter.
“The CFPB’s draft disclosure forms and the regulatory outline will be costly for small settlement agents to implement and could put small agents out of business by making the lender responsible for producing the settlement disclosure,” the letter said.
These significant additional costs are due mainly to four distinct problems with the draft forms and regulatory proposal: