CFPB Eases Ability to Access Mortgage Credit, Relaxes TRID Waiting Periods

The Consumer Financial Protection Bureau (CFPB) has taken steps to make it easier for consumers with urgent financial needs to obtain access to mortgage credit more quickly in the middle of the COVID-19 coronavirus pandemic, issuing an interpretive which applies to the TILA-RESPA Integrated Disclosure (TRID) Rule and Regulation Z rescission rules.

This is according to a statement issued by the Bureau on Wednesday afternoon. The interpretive rule is being made to, “provide guidance to creditors and other covered persons involved in the mortgage origination process, and stems from an understanding that “the COVID-19 pandemic could pose temporary business disruptions and challenges for covered persons that are involved in the mortgage origination process, including creditors, loan originators, settlement agents, and other parties such as real estate appraisers.”

Needs for mortgage transactions during this time are also likely to be “more acute,” the Bureau says, so it has issued the rule which is designed to ease restrictions related to TRID Rule waiting periods.

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“The steps we are taking today will help consumers facing financial emergencies obtain access to mortgage credit faster,” said CFPB Director Kathleen L. Kraninger in a press release announcing the issuance of the interpretive rule. “The pandemic is resulting in consumers facing various challenges, and our temporary and targeted solutions are intended to ensure that consumers receive the credit they need in a timely manner.”

These steps are being taken in order to help institutions better serve consumers to obtain access to mortgage credit quickly, despite operational disruptions, the Bureau said. They will also, “reduce regulatory uncertainty and allow creditors to focus their resources on meeting consumers’ needs.”

CFPB has issued an FAQ document that addresses when creditors must provide appraisals or other written valuations to mortgage applicants in order to hasten access to credit for coronavirus-affected consumers.

The TILA/RESPA Integrated Disclosure rule, also known as the TRID Rule, went into effect in October of 2015 as part of two pieces of legislation: the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). Some agencies have taken to calling it the “Know Before You Owe Rule.” It addresses information which consumers must read and be aware of before signing onto a mortgage, including credit and fee structures.

Read the full text of the interpretive rule, and the FAQ authored by the CFPB. The Bureau has also created an additional coronavirus-specific web portal designed to address other consumer concerns that stem from the COVID-19 national emergency.

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