CFPB Finalizes Updates to “Know Before You Owe” Mortgage Disclosure
Press Release
July 7, 2017
The Consumer Financial Protection Bureau (CFPB) today finalized updates to its “Know Before You Owe” mortgage disclosure rule with amendments that are intended to formalize guidance in the rule, and provide greater clarity and certainty. The changes will facilitate implementation of the Know Before You Owe rule by the mortgage industry. The CFPB is also releasing a limited follow-up proposal to address an additional implementation issue.
“A mortgage is one of the largest financial decisions a consumer will ever make, and CFPB’s rules help ensure consumers have the easy-to-understand information they need before making a decision that will significantly impact their financial lives,” said CFPB Director Richard Cordray. “Our updates will clarify parts of our mortgage disclosure rule to make for a smoother implementation process for lenders and consumers.”
The Know Before You Owe mortgage disclosure rule took effect Oct. 3, 2015. The CFPB’s rule created new, streamlined forms that consumers receive when applying for and closing on a mortgage. In addition to clarifications and technical corrections, the amendments that the Bureau is finalizing today address a handful of other issues within the rule, including:
Tolerances for the total of payments: Before the Know Before You Owe mortgage disclosure rule, the total of payments disclosure was determined using the finance charge as part of the calculation. The Know Before You Owe mortgage disclosure rule changed the total of payments calculation so that it did not make specific use of the finance charge. The Bureau is now finalizing updates to include tolerance provisions for the total of payments that parallel the tolerances for the finance charge and disclosures affected by the finance charge.
Housing assistance lending: The Know Before You Owe mortgage disclosure rule gave a partial exemption from disclosure requirements to certain housing assistance loans, which are originated primarily by housing finance agencies. The Bureau’s update, as finalized, promotes housing assistance lending by clarifying that recording fees and transfer taxes may be charged in connection with those transactions without losing eligibility for the partial exemption. The update also excludes recording fees and transfer taxes from the exemption’s limits on costs. Through the update, more housing assistance loans will qualify for the partial exemption, which should encourage these loans.
Cooperatives: The Bureau is finalizing updates to extend the rule’s coverage to include all cooperative units. Currently, the rule only covers transactions secured by real property, as defined under state law. Cooperatives are sometimes treated as personal property under state law and sometimes as real property. By including all cooperatives in the rule, the Bureau is simplifying compliance and ensuring that more consumers benefit from the rule.
Privacy and sharing of information: The Know Before You Owe mortgage disclosure rule requires creditors to provide certain mortgage disclosures to the consumer. The Bureau has received many questions about sharing the disclosures provided to consumers with third parties to the transaction, including the seller and real estate brokers. The Bureau understands that it is usual, accepted, and appropriate for creditors and settlement agents to provide a Closing Disclosure to consumers, sellers, and their real estate brokers or other agents. The Bureau is finalizing additional commentary to clarify how a creditor may provide separate disclosure forms to the consumer and the seller.
The finalized amendments are available at:
http://files.consumerfinance.gov/f/documents/201707_cfpb_Final-Rule_Amendments-to-Federal-Mortgage-Disclosure-Requirements_TILA.pdf
In addition to the final rule, the CFPB is issuing a proposal addressing when a creditor may use a Closing Disclosure, instead of a Loan Estimate, to determine if an estimated closing cost was disclosed in good faith and within tolerance. Comments are due 60 days after the proposal’s publication in the Federal Register and will be weighed carefully before a final regulation is issued.
The proposal is available at:
http://files.consumerfinance.gov/f/documents/201707_cfpb_Proposed-Rule_Amendments-to-Federal-Mortgage-Disclosure-Requirements_TILA.pdf
Testimonial for “Principles of Abstracting”Online Course
HI Jeanne,
I have to pass on this news to you, as you are a HUGE part of my success.
I found out last week that I passed my exam and am Licensed in SD now!!!
I raved of your courses to the Board of Abstracters. I know I wouldn’t have been successful in this quest so quickly without your help!
(even scored 100% in one of the 5 sections!!)
Thank you! Thank you!!
For whatever reason this industry is difficult to find training on. I wish it were required to have the standard of training you provide for all individuals to be licensed in any state!
Traci Renkly
Office Manager/Closing Agent
Brookings County Title Company
422 4th Street
Brookings, SD 57006
Free Speech Case Decided in CIC’s
An excellent opinion out of Lexology cites a New Jersey Supreme Court case that delivered its third opinion in the past few years about free speech rights of residents in common interest communities. The Court ruled that a resident (a regular critic of the board of directors) had the right to distribute leaflets under CIC doors throughout the building. The Court held that the “House Rule” banning all soliciting and distributing of written materials, including resident leaflets, was an unconstitutional limit to free speech rights and it went on to describe the kind of restrictions that could be adopted without infringing on the free speech rights.
Read the full article Free Speech in Condos and Coops here.
Can’t We All Just Get Along – some great advise
As a board member on not one, but two Homeowner’s Associations and several committees, I had to laugh when I read this great article by Nancy Polomis at Hellmuth and Johnson Law Firm in Edina, MN. It’s Hard not to recognize the cast of characters in her play. We all know the “Complainer”, the “Bully” and the “Hawk” in our daily activities and she gives some great advise as to how to handle them.
Read her advise along with some good reminders about MCOIA law in this article. Thank you Nancy!
Why Invest in Your Staff’s Future?
We all know the real estate business is cyclical. We need to hire one day, and then face the possibility of having to lay off. So why not make the most of your staff. Grow them to meet your needs. Grow them to feel invested in the company. An investment in your staff’s futures is an investment in your organization.
Top reasons why employees leave their company:
Lack of meaningful work. Does your staff appreciate how important their job is impacting the lives of your customers?
Importance of their job to the company. Do your employees recognize the importance of their job in the big picture of providing quality products to the consumer?
Growth and Opportunity Do they believe their employer is offering opportunity for growth and development?
So why spend the money for training?
1. To help your company fulfill future manpower needs.
2. To keep up with changing laws and rules that require people to consistently update their knowledge and skills
3. To help staff work with national companies, they need to know national laws and customs
4. For employee motivation and retention
5. For self-improvement and development
6. Someday we all want to retire and we need people to fill our shoes 🙂
Midwest Abstracting Seminar Announced
May 14-15, 2012 St Paul, MN
WHY TAKE THIS SEMINAR?
To Improve and Update Knowledge of Title Abstracting
To Improve and Update Knowledge of Title Examination
To Review for the Minnesota State Abstracter’s License
AS A RESULT OF THIS SEMINAR, PARTICIPANTS WILL BE ABLE TO:
Read, Draw and Recognize Valid Legal Descriptions
- Follow the Public Land Survey System to Identify Parcels
- Identify and Diagram Metes & Bounds Descriptions
- Discover Critical Information shown on Plats and Survey Maps
- Recognize Legal Differences in single family, Townhomes, Timeshares,
Condominiums, Co-ops, Common Interest Communities, etc.
- Identify Atypical Title Issues for Manufactured Housing/ Mobile Homes
- Summarize Documents Accurately in the Public Real Estate Offices
- List the Eight Public Offices that All Abstractors Must Know and Use
- Demonstrate the Ability to Index and Find all Public Real Estate Documents
- Answer Where Needed Records are Indexed, and How they are Organized
- Compare/ Contrast Torrens Property with Abstract Property Searches
- Explain Fundamentals of Bankruptcy and Bankruptcy Searches
Construct and solve missing links in a “chain of title”
- Follow complete Chains of Title and Find Missing Links
- Correctly Define Rights, Title & Interests follow them as they’re Created and Change
- Apply the 30 & 40 Year Laws in Abstracting and Examining and ID the Exceptions
- Properly Execute Abstract and Torrens Name Searches in All Counties
- Recite Critical Updated Minnesota Real Estate Laws and Title Searches
Remember information for your abstracter’s license test
- Define and Use Scores of Key Real Estate Title Terms
- Respond to Dozens of Updated Abstracter Questions
- Answer questions regarding the State Licensing Requirements, Laws and Rules
- Respond to Ethics and Standards of Professional Conduct Questions
Condo and Garage Stall Woes
For those who took the abstracting class May 2-3, here is a classic example that hit my email inbox today. It shows what can happen when legal descriptions intended for sale in a condominium are not carefully described. At the abstractor class we talked about garage stalls and storage spaces in particular, being separately salable units or appurtenances, depending on how they are described in the Declaration and Floor plans. Seems to me the Purchase Agreement in the scenario below was the problem. Maybe the two parking spaces were on the street…? After all, we are not mind readers, how are we supposed to know WHAT you bought if you don’t tell us….
Client purchased a condo unit and (he thought) two parking spaces from the developer. The accepted offer to purchase described the condo unit by number, but referred to the two parking spaces without specific designation. A title company prepared the deed of conveyance describing the unit by number, but omitting any reference to parking. The condo declaration provides that parking spaces are “units” rather than limited common elements, and can be separately conveyed as such. The title company acted as closing agent. What duty does the title company owe to the buyer in this case? Is the buyer entitled to rely on the closing agent to prepare a deed which conveys all of the property described by the purchase contract? Unfortunately for my client, he was not represented by counsel, did not notice any discrepancy in the deed, and has no recourse against the seller who went bankrupt. To further complicate matters, the two parking spaces were subsequently sold by an investor who purchased the unsold units out of receivership to an innocent third party. Any suggestions?
Right of First Refusal has Come Alive
A neighboring condominium association just bought a unit in foreclosure under its “right of first refusal.” For those of us in the Title Insurance industry, we expect to see a “Right of First Refusal” in condominium and homeowner association documents. We typically list the exception on title work, but most of us have rarely, if ever, seen a homeowners Association actually exercise that right- until now. Condominium and HOA Boards, in order to protect their communities, are taking title to these units that are in foreclosure and disrepair. They are repairing them, at the very least on the outside to protect the look of the community, and then renting them (often putting them on the market for sale while rented.) It can be a win-win. Rent comes in, the units are maintained and homeowners are protected. A good article in the Miami Herald gives more information.
Title Work sent to India
As many of us know, Land Records in the US are now routinely sent to India and the Philippines to be input into our computerized public land records.This is a video of some vintage (14 months old) showing the progress of one India firm with over 600 employees doing over 100 processes in all 50 states it says. An interesting overview for all in the title industry, showing the growth in outsourcing the title industry overseas and the many companies involved. See video at UTube here.
Good Court Call on C, C & Rs
This is a good court case for students and technicians in the title industry about enforcement of covenants, conditions and restrictions. It examines priority of liens, a land contract a second mortgage that is a Purchase money mortgage (yes, it is possible,) a foreclosure, etc. It was complex, but well-reasoned.
Read through this excellent case at Leagle.com here
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