CFPB Announces Slight Changes to “Know Before you Owe” Rule

On July 29th, the Consumer Financial Protection Bureau (CFPB) publicly announced changes to its problematic TRID or “Know Before you Owe” rule after issuing a Notice of Proposed Rulemaking earlier this May.

One of the more significant changes included is a clarification that lenders may share the Closing Disclosure (CD) form with real estate agents, thus helping prevent inaccuracies and subsequent delays during the closing process. Since implementation of the CFPB’s rule, lenders have been afraid to share closing documents with a homebuyer’s real estate agent for fear of violating consumer privacy.

The National Association of Realtors (NAR) called the changes a “significant victory.” NAR President Tom Salomone commented, “Realtors have reported challenges gaining access to the Closing Disclosure ever since TRID went into effect, despite a long history of access to the substantively similar HUD-1. Today the CFPB acknowledged that concern by making it clear that it is appropriate and accepted for creditors and settlement agents to share the CD with consumers, sellers, and their agents. That’s a significant victory that will help Realtors continue to provide the expert service their clients have come to expect.”

Heritage Action Real Estate Professionals acknowledged this issue and included it in their recent letter to the CFPB, however; more must be done to combat growing federal intervention in the housing industry. Clarifying mortgage service guidelines is helpful, but the fact that the CFPB is so heavily involved is a more serious and enduring problem.

Real estate professionals would greatly benefit from legislative reform, such as the Financial CHOICE Act, which would curtail CFPB regulation, bring the bureau under Congressional accountability, and eliminate some of the worst provisions of Dodd-Frank.

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