Posted on 20th Nov 2012 @ 12:51 PM

The Consumer Financial Protection Bureau’s November 16 announcement that it is amending Regulation Z to delay implementation of several new mortgage disclosures required by title XIV of the Dodd-Frank Act comes as welcome news to lenders. Without the temporary exemption, the disclosure requirements would have taken effect on January 21, 2013.

Instead, to avoid potential consumer confusion and reduce compliance burden for industry, the Bureau will implement the disclosures as part of the integrated mortgage disclosures it proposed in July to combine certain disclosures required by the Truth in Lending Act and the Real Estate Settlement Procedures Act.

Without the extra time, industry would have to implement the new disclosures twice—once on January 21, 2013, and once again when the Bureau finalizes the integrated TILA-RESPA disclosure regime. The disclosures covered by the exemption include:

• Warning regarding negative amortization features
• Disclosure of state law anti-deficiency protections
• Disclosure of partial payment policy before consummation and, for new creditors, after consummation
• Disclosure regarding mandatory escrow or impound accounts
• Pre-consummation disclosure regarding waiver of escrow
• Disclosure of cancellation of waiver of escrow after consummation
• Disclosure of monthly payment, including escrow, at initial and fully-indexed rate for ARMs
• Repayment analysis disclosure that includes amount of escrow payments for taxes and insurance
• Disclosure of aggregate amount of settlement charges, amount of charges included in the loan and the amount of settlement charges the borrower must pay at closing, the approximate wholesale cost of funds, and the aggregate amount of other fees or required payments
• Disclosure of aggregate amount of mortgage originator fees and the amount of fees paid by the consumer and the creditor
• Disclosure of total interest as a percentage of principal
• Optional disclosure of appraisal management company fees

“Considering these disclosures on the same timeline will ensure that consumers receive clear, concise, and consistent information,” said CFPB Director Richard Cordray. “By seeking public comment and conducting consumer-testing for these disclosures together, we can avoid the duplication and inefficiency that existed in the past.”

Though no deadline was mandated for finalizing the TILA-RESPA integrated proposal, the Bureau anticipates that the final rules will be adopted sometime in 2013.

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