The closing process will significantly change when the Consumer Financial Protection Bureau's fine rule for integrated mortgage disclosures goes into effect. The rule integrates forms required under the Truth-in-Lending Act (TILA) and Real Estate Settlement and Procedures Act (RESPA). A Loan Estimate will replace the current Good Faith Estimate and early TIL disclosure, while a Closing Disclosure will replace the HUD-1 and final TIL disclosure.
The CFPB announced a proposal to push back implementation until Oct. 3, 2015.
ALTA's Land Title Institute has created a training DVD to help you prepare for the disclosures. The DVD includes six modules that will help you understand the disclosures, including an introduction, what led to the development of the new disclosures, a step-by-step explanation of the Loan Estimate and Closing Disclosure, a discussion on how business processes will change, walk through how business relationships will change and how data will be shared, and additional resources and next steps.
A customizable model presentation also is available to guide discussions with your customers.
Purchase a recording of the TILA-RESPA Integrated Forum held in Dallas. The more than seven hours of discussion provides the latest interpretations and rules on the TILA-RESPA integration from the CFPB, addresses implications for closing/settlement, provides information on completing the Loan Estimate and Closing Disclosure, highlights how technology can be used to collaborate and solve compliance issues and explains how the entire real estate transaction will be changed.
Additional Documents and Resources
ALTA Settlement Statement
ALTA developed standardized ALTA Settlement Statements for title insurance and settlement companies to use to itemize all the fees and charges that both the homebuyer and seller must pay during the settlement process of a housing transaction. Four versions of the ALTA Settlement Statement are available. Download here.
Freddie Mac and Fannie Mae have released a common industry dataset, called the Uniform Closing Dataset, which leverages and maps to Mortgage Industry Standards Maintenance Organization (MISMO) data standards, to support implementation of the TILA-RESPA Closing Disclosure form.
If you want to report a possible violation of the Real Estate Settlement and Procedures Act (RESPA), email firstname.lastname@example.org. Include any evidence and contact information so that investigators may contact you. To the extent consistent with law enforcement needs, the Bureau will not disclose your identity and will maintain confidentiality as permitted by federal laws.
News on the Consumer Financial Protection Bureau
April 30, 2016
Revisiting RESPA: Understanding Things of Value and Referrals Compliance Webinar Series | 1:00-2:00 p.m. ET, Wednesday, May 25
While the Real Estate Settlement Procedures Act (RESPA) has been around since 1974, its broad language makes compliance with the law an ever-changing process. Recent CFPB and state enforcement actions have changed the game when it comes to understanding RESPA’s core prohibition on kickbacks and unearned fees. Learn the basics of Sections 8(a) and (b) of RESPA from a leading expert as attorney Andy Arculin of the law firm Venable explains the difference between a referral fee and an unearned fee or kickback, and what compensation is permissible under the law. Attendees will walk away with a good analytical framework to help with compliance.
April 28, 2016
ALTA Responds to CFPB’s Plans to Clarify TRID Responding to concerns raised by ALTA and other trade associations about the TILA-RESPA Integrated Disclosures (TRID or Know Before You Owe), the Consumer Financial Protection Bureau announced plans to provide further guidance and open a new rulemaking period. ALTA took the opportunity to remind the bureau that the disclosure of title insurance premiums remains one area that needs corrected.
There may be a Future for TRID Securitizations Yet
HousingWire | April 25, 2016 Investors are still not sold on the safety of the private label securitization market now that TRID is in the mix, despite the majority of the industry getting accustomed to the rules. However, a new proposal from an industry group brings a possible solution to help get the secondary market moving again thanks to a clearer outline of how to rate TRID loans.
How to Disclose Flood Insurance on Loan Estimate and Closing Disclosure The CFPB staff stated that the term “homeowner’s insurance” as used under the rule includes flood insurance. According to Richard Horn of Richard Horn Legal PLLC, the CFPB noted that the flood insurance payments would be reflected in the Escrow tables on page four of the Closing Disclosure, “but they did not explicitly state how it would be referred to (i.e., as Homeowner’s Insurance or Flood Insurance).”
April 21, 2016
Settlement Agents Must Provide Seller Closing Information to Lender Due to privacy concerns of sharing non-public personal information, lenders are having difficulty obtaining the seller information from title and settlement agents. Under TRID, though, title and settlement agents must provide the seller’s information to the lender, according to Richard Horn, the former CFPB attorney who led the TRID final rule and the design of the forms, and has since formed the law firm Richard Horn Legal PLLC.
April 21, 2016
Is TRID Hysteria Over? Time to Close Drops to 12-month Low
HousingWire | April 21, 2016 It’s now been more than six months since the implementation of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures rule. And it appears that, despite the initial hiccups and headaches, the industry may have TRID figured out, as the time to close a loan fell to a 12-month low in March, according to the latest report from Ellie Mae. Additionally, the average closing rate is rising, up to 70.6% in March compared to 69.9% in February,
April 21, 2016
Access Recording of CFPB TRID Webinar
On April 12, the CFPB held a webinar that addressed specific questions that various stakeholders have raised related to the interpretation and implementation of the rule’s requirements. Among the topics addressed were the disclosure of fees for owner’s title insurance, disclosing flood insurance premiums and separate disclosures.
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