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Special Alert: CFPB Director Opines on TRID Liability

Special Alert

Clinton R. Rockwell, Jeremiah S. Buckley, Melissa Klimkiewicz, Joseph M. Kolar, John P. Kromer, Amanda R. Lawrence, Steven R. vonBerg, Jeffrey P. Naimon

On December 29, 2015, CFPB Director Richard Cordray issued a letter in response to concerns raised by the Mortgage Bankers Association regarding violations of the CFPB’s new TILA-RESPA Integrated Disclosure (“TRID”) rule, also known as the Know Before You Owe rule. In an effort to address concerns that technical TRID violations are resulting in extraordinarily high rejection rates by secondary market purchasers of mortgage loans, Director Cordray acknowledged that, “despite best efforts, there inevitably will be inadvertent errors in the early days.” However, he suggested that rejections based on “formatting and other minor errors” are “an overreaction to the initial implementation of the new rule” and that the risk to private investors from “good-faith formatting errors and the like” is “negligible.” He expressed hope that this issue “will dissipate as the industry gains experience with closings, loan purchases, and examinations.”

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Questions regarding the matters discussed in this Alert may be directed to any of our lawyers listed below, or to any other Buckley Sandler attorney with whom you have consulted in the past.

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