The Consumer Financial Protection Bureau (CFPB) recently finalized various updates to its mortgage disclosure rule, often referred to as “Know Before You Owe” or the TILA-RESPA Integrated Disclosures (TRID). The updates were proposed approximately one year ago. They include technical corrections, formal guidance, and a few substantive changes. Some of the changes include:
- Adding tolerance provisions for total payments that track existing TILA requirements regarding finance charges
- Expanding the scope of certain exemptions for housing assistance loans
- Applying TRID to all cooperative units, regardless of whether the cooperative units are classified as real property under state law
- Providing guidance on sharing information with third parties
The new rule takes effect 60 days after publication in the Federal Register, but compliance is not mandatory until October 1, 2018. A copy of the final rule is available here.
Notably absent from the final rule is guidance on the “black hole”—the period of time between issuing the Closing Disclosure and the actual closing date when, in certain instances, lenders may be prevented from resetting tolerances (and passing on closing cost increases to the borrower). The amendments as originally proposed included a potential fix for this problem. However, the CFPB decided not to adopt the fix based on conflicting comments that it received. Instead, the CFPB issued a new proposed rule (with a new comment period) to address the “black hole” issue. A copy of the proposed rule is available here.