The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) mandated the reform of the consumer mortgage disclosure forms. The Consumer Financial Protection Bureau (CFPB) spent years working with the mortgage industry to come up with updated versions of the Truth-in-Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA) Integrated Disclosures (TRID).
“A little more than five years after a pretty painful implementation, it looks like TRID could be one of the next priorities on the regulatory reform agenda,” said SitusAMC Managing Director Tom Cronin.
The CFPB published a Request for Public Comment at the end of November soliciting feedback on the 2013 final TRID rule. As the agency reviews stakeholders comments it will also conduct its statutorily mandated assessment of rule, examining its effectiveness based on available evidence and data. To support its assessment, the CFPB has invited comments on recommendations to modify, expand or eliminate TRID altogether. Comments are due by January 21, 2020.
The 2013 rule, which went into effect in October 2015, created the Loan Estimate and Closing Disclosures used in mortgage loan applications today. “The new disclosures required significant time and resource investments on the part of lenders to update their systems and retrain staff,” said Cronin. “The original rollout had a bumpy start causing delays in the loan process.” Lender origination costs reportedly increased by more than $200 per loan following implementation.
“While the industry adjusted to the disclosures, issues around timing and tolerances remained a source of confusion for the industry,” said Cronin. To reduce that confusion, the 2015 rule was amended in July 2017 and April 2018.
The CFPB said in its Request for Public Comment, “While such amendments are not intended to be the subject of this assessment, the Bureau may consider certain of the amendments to the extent that doing so will facilitate a more meaningful assessment of the TRID rule and data is available.”
From consumers and consumer advocates to housing counselors, lenders, settlement agents and other industry stakeholders, the CFPB has asked for comments on the effects of this landmark post-crisis mortgage rulemaking on consumers, private companies and the housing market.
“We’ll be keeping a close eye on what major industry groups have to say in their comments and how the CFPB responds in the new year with its five-year post-implementation assessment,” said Cronin.
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