In October, the CFPB proposed two changes to the TILA-RESPA Integrated Disclosure Final Rule which was issued last November and becomes effective August 15, 2015. The proposed changes include: (1) an adjustment to the timing requirement for giving revised disclosures when the consumer locks the interest rate after the initial loan estimate disclosures have been given, (2) an amendment allowing language relating to new construction loans to be included on the loan estimate form, (3) an amendment to provide for placement of the NMLSR ID number on the integrated disclosures, and (4) several technical corrections and wording changes.
Under the integrated disclosure rule, a creditor must provide a revised loan estimate disclosure re-disclosing interest rate dependent charges and loan terms on the date that the interest rate is locked. The Bureau is proposing to allow creditors until the next business day after the rate lock occurs to provide the re-disclosure, rather than requiring it be provided on the same say as the rate lock. The Bureau is concerned that the same day re-disclosure requirement may cause creditors to impose cut off times or limits on a consumer's ability to lock rates at a time of the consumer's choosing. The Bureau is seeking comment on whether one business day is sufficient for creditors to provide the re-disclosure and whether consumer harm would result if the Bureau were to allow more than one business day for the re-disclosure.
Second, the Bureau is proposing to amend the rule to provide for the placement of language on the loan estimate form for new construction loans that is required in order for creditors to redisclose estimated charges. On new construction loans when settlement is expected to occur more than 60 days after the initial loan estimate is given, the creditor may give a revised disclosure if the original disclosure states the creditor may issue revised disclosures at any time prior to 60 days before consummation. As originally issued, the integrated disclosure rule did not permit that statement to be included on the form. The proposed change would correct that and allow the statement to be included.
The proposal would also amend the Reg. Z section which lists the specific documents that must contain the loan originator's name and NMSLR ID to include both the initial loan estimate and loan closing disclosures. Technical corrections include various non-substantive changes to sections of the commentary to clarify the intent of those sections.
Comments are due by November 10, 2014.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
