The combination of federal mortgage disclosures to streamline the Truth in Lending Act and Real Estate Settlement Procedures Act may be premature before the qualified mortgage definition is settled, mortgage industry participants stressed before Congress members Wednesday.
Both are tasks of the Consumer Financial Protection Bureau, and work on the the qualified residential mortgage rule and creation of a single, new mortgage disclosure has been under way by the CFPB as it makes new rules on deadlines set by the Dodd-Frank Act.
But combining the disclosures before the qualified mortgage rule is finalized could cause “massive confusion,” National Association of Realtors president Maurice Veissi said during the a hearing before members of a House Financial Services subcommittee.
The qualified mortgage rule, a hotly-debated issue among mortgage industry participants must be made by January 21, 2013. But the disclosures, which have been through extensive prototype testing and a widespread campaign, “Know Before You Owe,” for consumer input, are scheduled for a proposed rule by July 21, 2012. The order of the two rulemakings will be essential, industry members say.
“This is a massive and important undertaking,” said Brenda Hughes, SVP and retail lending administrator at First Federal Savings Bank in Twin Falls, Idaho, in her testimony. “The goal must be to achieve a workable and lasting framework of clear and comprehensible mortgage disclosures, and rigid time frames should not trump quality.”
Date said the mortgage disclosures rule would be proposed for comment on July 21, as planned. Mortgage industry representatives recommended that Congress delay the rulemaking dates to avoid having to implement disclosures two separate times.
Written by Elizabeth Ecker