With CFPB Director Richard Cordray’s tenure possibly on the line while a pro-business President-elect Donald Trump works on staffing up his incoming administration, the bureau earlier this month filed its highly anticipated appeal to the full U.S. Court of Appeals for the District of Columbia Circuit in its long-running dispute with PHH Corp. Back in mid-October, in PHH Corp. v. CFPB, a three-judge panel of the court nixed the agency’s $109 million penalty against the lender under the Real Estate Settlement Procedures Act, and determined that the CFPB’s leadership structure was unconstitutional because it is run by a sole director who can only be removed for cause. While an appeal by the bureau was widely expected, the issue took on ...
As part of its TRID 2.0 clarifying rulemaking, the CFPB sought comment on whether lenders should have the option of disclosing lender or seller credits as either credits specific to particular charges or general credits applicable to settlement costs. The Mortgage Bankers Association suggested the CFPB give lenders options and not settle on one approach. “Some lenders would prefer a single approach; others indicate that optionality is likely necessary,” the trade group said in a recent comment letter. It noted that seller credits are governed by sales contracts between the buyer and seller, and that local custom frequently comes into play as to who pays a specific fee, such as owner’s title insurance. “Similarly, the particular application of lender credits ...
The CFPB has made progress in its regulatory treatment of the cash-to-close table as reflected in its proposed rule to clarify aspects of its integrated disclosure rule, but more needs to be done, some leading industry groups said. “The cash-to-close sections of the Loan Estimate and Closing Disclosure represent some of the most challenging aspects of the TRID rule,” said the Real Estate Services Providers Council in a comment letter to the bureau. “The industry had noted that a failure of the prior disclosures was that they did not provide for disclosing to the consumer the lender’s estimate of the cash that he or she would need to close the loan,” it added. Further, the industry did not indicate that ...
Another area in which the CFPB sought industry input in its TRID clarifying rulemaking process is whether the proposed 120-day implementation period, starting from final publication in the Federal Register, will be adequate. Some industry commenters essentially said no. Others basically said, it depends. Wells Fargo was one of the commenters that fell into the former camp. “[S]ome of the clarifications in this proposal have already been implemented by the majority of the industry based on previous informal guidance from the bureau,” said the lender. “However, this proposal also contains a number of changes that are new or that are being proposed with more detailed direction than previously offered.” Some examples the lender cited were the proposed expansion to the ...
Some top industry players support the CFPB’s proposed amendment to its existing TRID rule that clarifies a lender’s ability to use a revised closing disclosure (CD) to reset tolerance baselines for fees and charges, as long as there are valid changes of circumstances. However, they think a few simple tweaks could maximize the usefulness of the change without creating an incentive for lenders to act in such a way as to defeat the bureau’s intention. The proposal clarifies that the authority to “rebaseline” exists for all CDs – not just the initial CD – and that for any CD issued after the first one, there is no timing requirement, and no timing limitation on the issuance of the initial CD. That means ...
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