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CFPB Proposes Updates to ‘Know Before You Owe’

July 29 – Consumer Financial Protection Bureau to its Know Before You Owe mortgage disclosure rule. The proposed amendments are intended to formalize guidance in the rule, and provide greater clarity and certainty. In addition to clarifications and technical corrections, the proposed amendments address a handful of other issues within the rule.

Proposed changes include:

— Including tolerance provisions for the total of payments that parallel existing tolerances for the finance charge and disclosures affected by the finance charge. This change would make the treatment of the total of payments disclosure consistent with what it was prior to the Know Before You Owe mortgage disclosure rule.

— Clarifying that recording fees and transfer taxes may be charged in connection with those transactions without losing eligibility for the partial exemption. The rule would also exclude recording fees and transfer taxes from the exemption’s limits on costs. Through the proposed update, more housing assistance loans would qualify for the partial exemption.

— Including all cooperative units. Cooperatives are sometimes treated as personal property under state law and sometimes as real property. By including all cooperatives in the rule, the bureau would simplify compliance.

— Adding commentary to clarify how a creditor may provide separate disclosure forms to the consumer and the seller.

The Independent Community Bankers of America issued a statement from President and CEO Camden Fine regarding the proposal.

“ICBA appreciates the CFPB’s proposal to clarify important aspects of the TRID rulemaking, which has had a significant impact on nearly every facet of the residential lending process. We look forward to continuing to work with the bureau on this important rule to ensure community bank concerns are addressed and that these requirements do not unduly burden consumers’ access to credit.”

The proposal is available at on the CFPB wesbsite, www.consumerfinance.gov. Comments are due by Oct. 18.

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