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Chairman of the House Financial Services Housing and Insurance Subcommittee, Blaine Luetkemeyer (R-MO) held a hearing yesterday to analyze how proposed changes to the real estate process will affect lenders and consumers. The subcommittee assessed the positive and negative aspects of changes to the real estate settlement process like the TILA-RESPA Integrated Disclosure rule being finalized by the Consumer Financial Protection Bureau (CFPB).
“Purchasing a home is one of the biggest and most important decisions most Americans will make,” Luetkemeyer said. “That is why we owe it to all home buyers to hold this hearing, to continue to press the CFPB, and make sure the home buying process is more straightforward. “
The TRID rule, which is scheduled to take effect on August 1, will impact the compliance side of the real estate market dramatically. According to the compliance guide issued by the CFPB, the rule merges four disclosures required under TILA and RESPA for closed-end credit transactions secured by real property into two forms. The first, a Loan Estimate must be given or mailed to the consumer no more than three business days after receipt of the application. The second, the consumer must be provided a Closing Disclosure at least three business days before the application is approved.
TRID was first introduced in 2010 from the Dodd-Frank Wall Street Reform Act, and was approved in 2013. Before the approval, a comment period and months of education, training, and preparation on the part of lenders took place.
The subcommittee’s hearing mainly placed their concerns on how the TRID rule and changes to the mortgage acquirement process will affect consumers, lenders, title agents, and real estate professionals. Luetkemeyer noted in his speech that he hopes CFPB Director Richard Cordray will meet with Members of Congress that want to see the CFPB “implement a period of restrained enforcement.” This is an idea that gained unanimous, bipartisan support and would “ensure that home buyers and sellers aren’t negatively impacted by something designed to help them.”
“The dramatic changes to this process have the potential to unnecessarily delay closings and cause a ripple effect throughout real estate markets,” Luetkemeyer said. “We owe it to all Americans to make sure this process works and is as simple as possible.”
In a recent press release, the Association of Mortgage Professionals (NAMB) announced that they are also requesting a good faith grace period for compliance with the quickly-approaching TRID requirements.
"While we appreciate the CFPB's efforts to create new integrated forms that are more logical and consumer friendly than those originally proposed," said John Councilman, President of NAMB. "NAMB continues to believe the strict requirements and exposure to legal liability that lenders are subject to under the new rules will lead to a variety of unintended consequences that will have a negative impact on consumers and the economy."
