Several months ago, the Consumer Financial Protection Bureau (CFPB) published in its blog two sample closing disclosures that combine final Truth in Lending (TIL) disclosures with HUD-1 disclosures. They requested that consumers and industry members compare two prototypes for the disclosures and vote on the preferred option.
Now the CFPB is asking consumers and industry members to look specifically at how the new closing disclosure prototypes work with the application disclosure prototype, which was pretty much finalized last fall. This week the CFPB has begun real world testing of the initial and final disclosures in Philadelphia, PA.
The Dodd-Frank Act requires these forms to be completed by July 21, 2012. The CFPB appears to be close to completing the forms. In addition to completing the forms the CFPB needs to complete massive changes to Regulation Z (TIL) and Regulation X (RESPA) related to the forms. We have not received any signals from the CFPB on the status of the revised regulations.
We assume that the CFPB has been completing regulation changes as they have been developing the forms. If the regulations and revised forms are completed by early summer the CFPB will publish the changes as a proposed rule, which will include an appropriate comment period (at least 90 days). Then they will digest the comments they receive and based on the comments develop and publish a final rule, which will include a delayed effective date. It is hard to imagine a final rule being published prior to the beginning of 2013, with an effective date earlier than mid-year 2013. The process could easily take an additional six month or more to complete.
The combined mortgage disclosures are the future of mortgage lending. The current TIL disclosures have been in use since 1982. The current GFE and HUD-1 forms have only been in use since January 1, 2010, although it seems the pain has been spread over a much longer period. The new forms will likely be the standard for the next decade or two.
Catch a glimpse of your future. View the initial and final prototypes at: