CFPB Proposes Mortgage Rule Delay
COLIN WILHELM | June 25, 2015
The Consumer Financial Protection Bureau is proposing a delay to new mortgage disclosure rules, pushing back the start date to Sat., Oct. 3.
The original deadline for the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure regulation was Aug. 1. The proposed date change still must undergo public comment before July 7. The new implementation date will not become official until the final rule is issued by the CFPB
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The new "Know Before You Owe" mortgage disclosure rules aim to streamline the disclosure process for home buyers during closing by merging the Truth in Lending Act and the Real Estate Settlement Procedures Act into one form.
"The bureau believes that scheduling the effective date on a Saturday may allow for smoother implementation by affording industry time over the weekend to launch new system configurations and to test systems," the CFPB wrote in the proposed rule that details the new deadline. "A Saturday launch is also consistent with existing industry plans tied to the Saturday, August 1, effective date."
The CFPB also states in the proposal: "In recent weeks, the bureau has learned that delays in the delivery of system updates have left creditors and others with limited time to fully test all of their systems and system components to ensure that each system works with the others in an effective manner. These delays pose risks to the smooth implementation of the new forms mandated under the TILA-RESPA Final Rule."
Nearly 300 U.S. Senators and Representatives expressed concern to the CFPB late last month about the original planned Aug. 1 start date for the new process during the summer's peak home buying season. The National Association of REALTORS® has also backed an extension to the new rules to avoid any disruption during the housing market's busiest time of year.
"We will continue to work with CFPB to minimize any possible market disruptions or uncertainty that could develop following the implementation," Chris Polychron, president of the National Association of REALTORS®, said in a public statement last week about the delay in implementing the new rules.
Source: National Mortgage News