CFPB Delays New Mortgage Disclosure Launch Date

The Consumer Financial Protection Bureau has issued an extension for new mortgage disclosures, initially slated to go into effect in January. The agency will wait to implement the new disclosure forms until other mortgage rule makings have been completed.

The extension, the CFPB says, will allow for a more “seamless” integration with other disclosures for the mortgage industry and for consumers. 

“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.”

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The extension is seen by mortgage industry participants as a win, in that consumers and lenders will not have to adjust twice to use of the new documents.

“This rule has demonstrated what a regulator should do,” Richard Andreano, partner and practice leader for Ballard Spahr Andrews & Ingersoll, LLP’s Mortgage Banking Group told RMD. “It is a positive sign they took this approach and are following through. This is one aspect where the Bureau got it right.”

The CFPB is following protocol set by the Dodd Frank Act that requires the integration of Truth in Lending and Real Estate Settlement and Procedures Act (RESPA) disclosures as well as new disclosure requirements. They were set to take effect January 21, unless other action was taken. 

“This provided a chance to test in brand new disclosure environment,” Andreano said. 

The CFPB has said it will go through a separate process to rewrite reverse mortgage disclosures, a process which will likely be informed by the experience on the “forward” documents. The National Reverse Mortgage Lenders Association has stated its concern with the process and reasons why reverse mortgage documents should be exempt. 

Written by Elizabeth Ecker

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