WASHINGTON (7/16/12)--The Consumer Financial Protection Bureau (CFPB) last week proposed a new, simplified mortgage disclosure form and released rules that implement the mortgage form changes. The Credit Union National Association (CUNA) is asking credit unions for general and specific suggestions on how elements of the CFPB proposals could be improved.
The proposed rules amend Regulation Z, which implements the Truth in Lending Act (TILA), and Regulation X, which implements the Real Estate Settlement Procedures Act (RESPA). The regulations back up the changes made to the TILA and RESPA forms that homebuyers are given when they apply for and close a mortgage. (See related July 10 News Now
story: CFPB unveils proposed mortgage disclosure forms)
The mortgage rules would apply to the majority of consumer mortgages, but would not apply to home equity lines of credit, reverse mortgages, or mortgages that are secured by mobile homes or dwellings that are not attached to land. Creditors that process five or fewer mortgages per year would also not be subject to the rules.
CUNA continues to work through the 1099 page CFPB mortgage rule release, and is planning multiple comment calls and surveys on different aspects of the proposal.
Most of the CFPB proposal has a comment deadline of Nov. 6, but there are two significant provisions that have a comment deadline of Sept. 7. Those two provisions are addressed in this first comment call.
One such provision would require lenders to include most up-front costs associated with a mortgage to be included in the finance charge. Under the proposal, loan charges or fees would need to be included in the finance charge, but late fees, delinquency or default charges, seller's points, some escrow payments and most insurance premiums would not need to be included.
CUNA in the comment call asks credit unions which fees should be removed from or added into the proposed finance charge structure, and whether the proposed changes to the finance charge structure would create financial or compliance burdens for credit unions.
The CFPB has also asked for earlier comment on a list of disclosures it is considering delaying. That list includes disclosures related to:
- Negative amortization features;
- State law protections for borrowers regarding deficiency judgments;
- Partial payment policies;
- Mandatory escrow accounts;
- Escrow waivers;
- Monthly payments for variable rate loans;
- Repayment analysis;
- Settlement charges and fees;
- Mortgage origination fees;
- Total interest as a percent of principal; and
- Optional appraisal management company fee disclosures.
CUNA's comment call asks whether the compliance date for these disclosures should be extended, and if delaying the compliance date for these disclosures until January 2014 would be sufficient.
CUNA has asked credit unions to respond to this first comment call by Aug.10. For the CUNA comment call, use the resource link.
The association's second comment call will have additional details on the requirements contained within the proposed rule.