By ABIA Outside Counsel, McIntyre & Lemon, PLLC
The CFPB sent a letter to mortgage industry trade groups regarding the Know Before You Owe mortgage disclosure rule
The rule, also known as the TILA-RESPA Disclosure rule—which requires disclosure forms that are easier to use and clearly present terms of mortgage to a borrower— went into effect on October 3.
The letter notes that in preparation to adjust to the requirements of the rule, the mortgage industry has had to make significant systems and operational changes involving coordination with third parties for implementation. The mortgage industry has allocated resources for these purposes and toward understanding the requirements, training affected personnel and addressing technical issues and other questions that will arise when the new forms are in use.
According to the CFPB’s press release, initial compliance examinations will evaluate an institution’s compliance management system and efforts to come into compliance in a timely manner, taking into consideration the scope and scale of changes essential to achieving effective compliance. Examiners will consider the institution’s implementation plan including policy, procedure and process updates, training relevant staff, and its ability to resolve early technical problems and other challenges related to implementation.
The Bureau took a similar approach in initial examinations for compliance with the mortgage rules that became effective at the beginning of January 2014 and found that institutions made good faith efforts to comply and were typically successful in their implementation.
Read CFPB Press Release.