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CU Suggestions In Final CFPB Mortgage Forms
WASHINGTON (11/20/13)--The Consumer Financial Protection Bureau's (CFPB) "Know Before You Owe" mortgage disclosure forms, which will be released later today at a bureau field hearing, contain changes advocated by credit unions and the Credit Union National Association.
 
Bernie Winne, CEO at Boston Firefighters CU, will speak on behalf of credit unions, CUNA and the Massachusetts Credit Union League (MCUL) at a CFPB hearing today. CFPB Director Richard Cordray is also scheduled to meet with MCUL representatives after the session.

The field hearing, entitled "Know Before You Owe: Mortgages," will be held in Boston, Mass., and is scheduled to begin at 11 a.m. (ET).

Among the changes is the removal of language that would have required lenders to maintain "standardized, machine-readable" electronic versions of loan estimates and closing disclosures provided to consumers. The CFPB also removed a total cost of funds disclosure from both the Loan Estimate and Closing Disclosure. This disclosure, which would have required credit unions to reveal the approximate amount of the wholesale rate of funds in connection with a given mortgage loan, was "of questionable value to consumers," CUNA noted.

Credit unions and others also opposed CFPB regulations that would have counted Saturday in the three-day window lenders were given to provide Loan Estimate forms to new mortgage borrowers. The CFPB final rule does not count Saturdays as a "business day" for this purpose.
 
The final disclosure forms and related regulations do not adopt a more inclusive annual percentage rate (APR) and finance charge definition. However, the bureau said it would review both definitions as part of their five-year review of the regulations. Changes may be incorporated at that time, they said.
 
The final version of the forms and regulations will also:
  • Require the Closing Disclosure, which is designed to take the place of the existing HUD-1, to be provided to borrowers three days in advance of a mortgage loan closing; and
  • Require Spanish versions of the Closing Disclosure and Loan Estimate forms to be provided under certain circumstances for the benefit of Spanish-speaking consumers.
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