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  • Unofficial Transcript of CFPB's November 18 Webinar on Completing the Closing Disclosure Form

    Consumer Finance

    On November 18, the CFPB presented Part 4 in its series of webinars (hosted by the Federal Reserve) addressing frequently asked questions regarding the TILA-RESPA Integrated Disclosure (“TRID”) rule. In this session, the CFPB addressed questions on completing the Closing Disclosure form.  As with past CFPB webinars on the TRID rule, BuckleySandler has prepared a transcript of the webinar that incorporates the CFPB’s slides. The transcript is provided for informational purposes only and does not constitute legal opinions, interpretations, or advice by BuckleySandler. The transcript was prepared from the audio recording arranged by the Federal Reserve and may have minor inaccuracies due to sound quality. In addition, the transcripts have not been reviewed by the CFPB or the Federal Reserve for accuracy or completeness.

    Questions regarding the matters discussed in the webinar or the rules themselves may be directed to any of our lawyers listed below, or to any other BuckleySandler attorney with whom you have consulted in the past.  In addition, please visit our TRID Resource Center for additional information about the TRID rule and related materials.

     

     

    CFPB TRID

  • Webinar Recap: Discussing "The New CFPB Mortgage Origination Rules Deskbook"

    Consumer Finance

    On October 28, 2014, BuckleySandler presented the webinar “Discussing The New CFPB Mortgage Origination Rules Deskbook.” Contributors Joseph Kolar discussed the need for the book and highlighted information from specific chapters. The webinar was moderated by Jeffrey Naimon. This webinar recap covers the highlights from their discussion. For more information about the CFPB Deskbook, including information on obtaining hard copies, email CFPBDeskbook@buckleyfirm.com.

    The purpose of the CFPB Deskbook is simple – consolidate in a clear, organized format, material from all of the many sources of regulatory guidance on the Consumer Financial Protection Bureau’s (CFPB) mortgage origination rules. .

    Kolar followed their general discussion of the book with an overview of what they consider some of the most valuable chapters, including, among others:

    • ATR / QM Rule -- Incomplete Loan File (Chapter 1)
      • The CFPB explicitly declined to adopt a rule, similar to the familiar parol-evidence rule of contract law, under which only the written record of a credit decision at origination could be considered in a later ability-to-repay / QM challenge by the borrower.
      • While this can leave creditors vulnerable to borrower claims in such a challenge that the written record is incomplete and fails to reflect information the borrower supplied.
    • Calculating Points and Fees (Chapter 2)
      • While the rule and commentary are clear on the treatment of private mortgage insurance, the term “prorated” is never defined in the rule itself. This leaves the term up for definition by contracts or state law. However, the CFPB did develop a calculation to define “prorate” –only offered orally in a CFPB staff webinar.
      • The CFPB Deskbook includes transcripts of this webinar and explains the calculation.
      • BuckleySandler also has published a Special Alert on the CFPB’s October 2014 rule amendments, which provide a points-and-fees cure mechanism. An update to the CFPB Deskbook describing those amendments also is coming soon.
    • Loan Originator Compensation Rules (Chapter 4)
      • Naimon described the proxy rules applicable to the ban on term-based loan originator compensation as “a quagmire.” The CFPB Deskbook offers clarification on issues related to proxy such as geography, loan origination channels and borrower income levels.
    • Point Banks (Chapter 4)
      • Since the loan originator compensation rule was released, organizations have sought clarification as to what a point bank actually is and if are they allowed. The CFPB offered clarification on these questions in preamble language, which is captured in the CFPB
    • TILA-RESPA Integrated Disclosures (TRID) Rule (Chapter 10)
      • While this rule is not yet in place, the CFPB Deskbook includes a summary of the rule, as well as discussions of issues raised most often by our clients regarding the rule.
      • BuckleySandler has also developed a TRID Resource Center.

    CFPB Mortgage Origination TRID

  • Proposed Changes to the TILA-RESPA Integrated Disclosure Rule

    Consumer Finance

    On October 10, the CFPB issued a proposal to modify and make technical amendments to the TILA-RESPA Integrated Disclosure Rule, issued in November of 2013. Specifically, the CFPB proposes to (i) relax the timing requirements associated with the redisclosure of interest rate dependent charges and loan terms after consumers lock in a floating interest rate, such that creditors would have until the next business day after a consumer locks in a floating interest rate to provide a revised disclosure; and (ii) add language to the Loan Estimate form that creditors could use to inform a consumer that the consumer may receive a revised Loan Estimate for a construction loan that is expected to take more than 60 days to settle. In addition, the Bureau proposes non-substantive changes such as technical corrections and corrected or updated citations and cross-references in the regulatory text and commentary, minor word changes throughout the regulatory text and commentary, and an amendment to the 2013 Loan Originator Rule, to provide for placement of the NMSR ID on the integrated disclosures. The CFPB is accepting comments on the proposed changes through November 10, 2014. The CFPB noted its intention to finalize the proposed amendments quickly in order to provide the industry adequate time to implement any resulting changes by August 1, 2015, the effective date of the TILA-RESPA Integrated Disclosure Rule.

    CFPB TILA RESPA TRID

  • CFPB Updates Dodd-Frank Mortgage Rules Readiness Guide

    Consumer Finance

    Recently, the CFPB published an updated mortgage rules Readiness Guide for financial institutions to assist them in complying with new mortgage lending requirements. The Guide contains: (i) a summary of the mortgage rules finalized by the CFPB as of August 1, 2014; (ii) a readiness questionnaire to help perform self-assessments; (iii) a section on frequently asked questions; and (iv) a section on further tools to assist with compliance with the new rules. The guide discusses, among other rules, the TILA-RESPA Integrated Disclosure rule that integrates the mortgage loan disclosures currently required under TILA and RESPA. That rule requires a new Loan Estimate form that combines two existing forms, the Good Faith Estimate and the initial Truth-in Lending disclosure. The Loan Estimate must be provided to consumers no later than the third business day after they submit an application. The rule also requires a Closing Disclosure form, which combines the current Settlement Statement (“HUD-1”) and final Truth-in Lending disclosures forms. The Closing Disclosure must be provided to consumers at least three business days before consummation of the loan. The new requirements are effective for loans where the lender receives an application on or after August 1, 2015.

    TILA RESPA TRID

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