Updated 9-23-15: Diane Thompson, Managing Counsel in the CFPB’s Office of Regulations, said that when the Closing Disclosure rule goes into effect on October 3, the agency will not come down hard on companies making a good faith effort to implement the rule, according to media reports.
Speaking at a Mortgage Bankers Association meeting September 21, Thompson said the agency is focused on helping the industry comply with the new mandates — including the Closing Disclosure.
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Notary signing agents should expect to start seeing the Consumer Financial Protection Bureau’s (CFPB) new Closing Disclosure in late October or early November, but the transition period for fully implementing the form will last “many months.”
The CFPB announced this week that it had finalized October 3, 2015 as the date the rule creating the Disclosure will go into effect. That means lenders will be expected to use the new Closing Disclosure form, which combines the current HUD-1 Settlement Statement and final Truth In Lending Statement, for most conventional residential mortgage applications submitted on or after October 3.
The mortgage disclosure rules were originally scheduled to be implemented on August 1, but the CFPB proposed the delay to correct an administrative error and give the mortgage industry some breathing room.
The Transition Period
The postponement raised questions about a previously announced enforcement grace period. However, in testimony before the Senate Banking Committee last week, CFPB Director Richard Cordray said that for “many months” after the rule goes into effect, the agency will concentrate on helping lenders fix problems rather than taking punitive action, according to numerous media reports.
The Closing Disclosure is part of the new TILA-RESPA Integrated Disclosures Rule, which is widely seen as the most significant development for the mortgage industry in many years.
For several months, mortgage industry executives have been encouraging NSAs to get training and familiarize themselves with the new Closing Disclosure before it goes into effect. Such training helps signing agents gain a competitive advantage as lenders prepare for October 3.
- Here are several resources for NSAs to learn more about the TRID rule and the Closing Disclosure
The Texas Disclosure
In the meantime, the Texas Department of Insurance has announced that it is adding its own new disclosure as an addendum to the CFPB’s Closing Disclosure.
While the CFPB’s Disclosure “is designed to provide consumers with a better understanding of the costs of their real estate transactions, some of the changes conflict with Texas closing requirements and practices,” the TDI said in its announcement. “The Texas Disclosure adds important information to fully disclose the details of closing and of title insurance transactions.”
The department stressed that the Texas Disclosure will not replace the federal Closing Disclosure; it will be an addition to loan packages.
So NSAs in Texas will need to be familiar with that form as well.
Michael Lewis is Managing Editor of member publications for the National Notary Association.