“The Consumer Financial Protection Bureau has begun drafting a Notice of Proposed Rulemaking (NPRM) to make adjustments to the Know Before You Owe rule,” CFPB director Richard Cordray told industry trade groups in an April 28 letter. Cordray said he hopes the NPRM will be issued in late July.
Well his “hopes” became reality late last week. On July 28 the CFPB Published a 293-page proposal. The proposal has a quick 82-day comment period, which ends on October 18, 2016.
The proposal memorializes certain past informal guidance, whether issued through webinar, compliance guide, or otherwise, and makes additional clarifications and technical amendments. Major proposed provisions include:

  • Creating tolerances for the total of payments similar to the existing provisions regarding the finance charge;
  • Expanding a partial exemption for certain non-interest bearing subordinate lien transactions that provide down payment and other homeowner assistance (housing assistance loans) that is rarely used;
  • Clarifying coverage for cooperative units;
  • Clarifying rules for sharing of disclosures with sellers and various other parties, including real estate agents, involved in the origination process in light of privacy concerns.

The proposal also provides clarification on:

  • Affiliate charges;
  • Calculating cash to close table;
  • Construction loans;
  • Decimal places and rounding;
  • Escrow account disclosures;
  • Escrow cancellation notices;
  • Expiration dates for the closing costs disclosed on the Loan Estimate;
  • Gift funds;
  • The “In 5 Years” calculation;
  • Lender and seller credits;
  • Lenders’ and settlement agents’ respective responsibilities;
  • The list of service providers;
  • Model forms;
  • Non-obligor consumers;
  • Partial payment policy disclosures;
  • Payment ranges on the projected payments table;
  • The payoffs and payments table;
  • Payoffs with a purchase loan;
  • Post-consummation fees;
  • Principal reduction (principal curtailment);
  • Disclosure and good faith determination of property taxes and property value;
  • Rate locks;
  • Recording fees;
  • Simultaneous second lien loans;
  • The summaries of transactions table;
  • The total interest percentage calculation; and
  • Trusts.

A copy of the proposed rule is available at file:///C:/Users/Jack/Downloads/20160728_cfpb_Amendments_to_Federal_Mortgage_Disclosure_Requirements_Under_TILA%20(1).pdf.