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CFPB Proposed Updates to “Know Before You Owe” Mortgage Disclosure Rule

The Consumer Financial Protection Bureau (CFPB) today proposed updates 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. The changes would augment implementation of the “Know Before You Owe” rule, which took effect last year, and help facilitate compliance within the mortgage industry.

The proposed amendments include clarifications on various issues that the bureau said it has provided in informal guidance. The agency has proposed additional tolerance provisions, clarified a partial exemption for housing finance agencies, extended the rule's coverage to all cooperative units, and provided more clarity about privacy and the sharing of information. The CFPB's rule, which went into effect on 3rd October 2015, created new mortgage disclosure forms that are given to consumers when applying for and closing on a mortgage. The new disclosure rule places the responsibility for accuracy and the delivery of disclosures on creditors. The rule was a requirement of the Dodd-Frank Act. The rule was meant to help consumers understand the total costs of a home loan, but lenders have sought for more guidance on certain issues.

News Characteristics

Date : Jul 29, 2016
Region : North America
Industry : Mortgage Companies
Function : Regulation and Compliance
Sub-Function : Regulatory changes