By: Brad Washburn, CRCM, CAMS
On July 7, 2017, the Consumer Financial Protection Bureau (CFPB) issued a final rule (2017 Rule) to amend and clarify certain TRID mortgage disclosure provisions implemented by Regulation Z. The 560-page final rule codifies previous informal guidance and some of the proposed changes provided by the CFPB in July 2016. These changes provide greater certainty for stakeholders to facilitate implementation. The CFPB also released a limited follow-up proposal to address an unresolved implementation issue related to using revised Closing Disclosures to reset tolerances for changed circumstances occurring near consummation.
In addition to clarifications and technical corrections, the amendments address several implementation issues within the rule, including:
The 2017 Rule will be effective 60 days after its publication in the Federal Register; however, mandatory compliance will be required for an application received on or after October 1, 2018, with one exception. The rules relating to the escrow closing notice and partial payment disclosure requirements apply starting October 1, 2018 without regard to when the creditor or mortgage broker receives the application.
The 2017 Rule also includes an optional compliance period, which begins on the to-be-determined effective date. Beginning on the effective date, a financial institution may choose to comply with the 2017 Rule for an application received before October 1, 2018. Generally, during this optional compliance period, a financial institution may comply with the changes outlined in the 2017 Rule all at one time or phase in the changes over time. Additionally, for an application received prior to October 1, 2018, optional compliance continues to apply to that transaction after October 1, 2018 except as noted above for the escrow closing notice and partial payment disclosure.
As previously mentioned, the CFPB is issuing a proposal addressing when a creditor may use a revised Closing Disclosure to determine if an estimated closing cost was disclosed in good faith and within tolerance. This proposal reopens an issue that the CFPB previously attempted to address in its July 2016 proposal. If finalized, the proposal would allow creditors to use either the initial or a revised Closing Disclosure within three business days of learning of a changed circumstance to reset tolerances for purposes of determining if a revised estimated closing cost was disclosed in good faith, regardless of when the Closing Disclosure is provided relative to consummation. Comments are due 60 days after the proposal’s publication in the Federal Register and will be reviewed by the CFPB before a final regulation is issued.
In addition, the CFPB has announced it will update the TILA-RESPA Integrated Disclosure Rule Small Entity Compliance Guide and Guide to the Loan Estimate and Closing Disclosure Forms. To see the complete final rule and proposal, follow the links below.
The finalized amendments are available here.
The proposal is available here.
Consistent with previous TRID rules, the 2017 Rule is complex, and contains many technical requirements which can present significant implementation challenges. As such, Steve H. Powell and Company is excited to announce we will be hosting a 2017 TRID Final Rule Webinar to break down the new rules and provide practical tips to assist stakeholders in preparation for the new rules. Stay tuned for more information regarding this learning opportunity.
On July 7, 2017, the Consumer Financial Protection Bureau (CFPB) issued a final rule (2017 Rule) to amend and clarify certain TRID mortgage disclosure provisions implemented by Regulation Z. The 560-page final rule codifies previous informal guidance and some of the proposed changes provided by the CFPB in July 2016. These changes provide greater certainty for stakeholders to facilitate implementation. The CFPB also released a limited follow-up proposal to address an unresolved implementation issue related to using revised Closing Disclosures to reset tolerances for changed circumstances occurring near consummation.
In addition to clarifications and technical corrections, the amendments address several implementation issues within the rule, including:
- Partial Payment Disclosures and Escrow Closing Notices
- Loans Secured by Cooperatives
- Loans to Certain Trusts
- Partial Exemption for Certain Housing Assistance Loans
- Construction Loans
- Simultaneous Subordinate Lien Loans
- Tolerances for Total of Payments Disclosure
- Good Faith and Revised Disclosures
- Decimal Places and Rounding
- Calculating Cash to Close
- Other Disclosures in Loan Estimates and Written Lists of Providers
- Other Disclosures in Closing Disclosures
- Sharing Disclosures with Various Parties During the Origination Process
The 2017 Rule will be effective 60 days after its publication in the Federal Register; however, mandatory compliance will be required for an application received on or after October 1, 2018, with one exception. The rules relating to the escrow closing notice and partial payment disclosure requirements apply starting October 1, 2018 without regard to when the creditor or mortgage broker receives the application.
The 2017 Rule also includes an optional compliance period, which begins on the to-be-determined effective date. Beginning on the effective date, a financial institution may choose to comply with the 2017 Rule for an application received before October 1, 2018. Generally, during this optional compliance period, a financial institution may comply with the changes outlined in the 2017 Rule all at one time or phase in the changes over time. Additionally, for an application received prior to October 1, 2018, optional compliance continues to apply to that transaction after October 1, 2018 except as noted above for the escrow closing notice and partial payment disclosure.
As previously mentioned, the CFPB is issuing a proposal addressing when a creditor may use a revised Closing Disclosure to determine if an estimated closing cost was disclosed in good faith and within tolerance. This proposal reopens an issue that the CFPB previously attempted to address in its July 2016 proposal. If finalized, the proposal would allow creditors to use either the initial or a revised Closing Disclosure within three business days of learning of a changed circumstance to reset tolerances for purposes of determining if a revised estimated closing cost was disclosed in good faith, regardless of when the Closing Disclosure is provided relative to consummation. Comments are due 60 days after the proposal’s publication in the Federal Register and will be reviewed by the CFPB before a final regulation is issued.
In addition, the CFPB has announced it will update the TILA-RESPA Integrated Disclosure Rule Small Entity Compliance Guide and Guide to the Loan Estimate and Closing Disclosure Forms. To see the complete final rule and proposal, follow the links below.
The finalized amendments are available here.
The proposal is available here.
Consistent with previous TRID rules, the 2017 Rule is complex, and contains many technical requirements which can present significant implementation challenges. As such, Steve H. Powell and Company is excited to announce we will be hosting a 2017 TRID Final Rule Webinar to break down the new rules and provide practical tips to assist stakeholders in preparation for the new rules. Stay tuned for more information regarding this learning opportunity.
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