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CFPB RESPA/TILA Rule Reference: 6.5, page 30, CFPB Detailed summary of the rule
To be considered a true application for a mortgage loan, a borrower must submit six key pieces of information to their potential creditor either written or electronically. If the borrower orally provides this information, there must be a written record of that event. Here’s a breakdown of the six required pieces of information.
Required Information to trigger a Loan Estimate:
(1) The consumer's name
(2) The consumer's income
(3) The consumer's Social Security number to obtain a credit report (or other unique identifier if the consumer has no Social Security number)
(4) The property address
(5) An estimate of the value of the property
(6) The mortgage loan amount sought
These are the new guidelines provided by the CFPB to set a standard for what information must be provided by the borrower in order to qualify as a true application for a mortgage loan. This list does not limit a creditor from requesting additional information from the borrower in their application.
Although the creditor may request additional pieces of information, once they have received the required six items, the creditor is now required to provide the borrower with an official Loan Estimate within three business days of receiving the sixth pieces of information.
The various forums the borrower may use to provide this information to the creditor could have potential operational impacts on the creditor and thus potentially cause an issue in delivering the Loan Estimate within the three business days timing requirement. Giving the consumer options is necessary, but setting a standard would be more efficient. If creditors had a standard digital forum for borrowers to submit their information and receive the estimate in the same place, this could potentially eliminate confusion and increase efficiency.
For more information on the impacts to the industry and how technology solutions can help your business mitigate them, visit the TilaRespa Knowledge Center.
All information and views expressed or implied are provided without warranty and are only the opinion of Pavaso, Inc. Each participant should seek legal representation for legal interpretation of the ruling and the CFPB directly for final instruction and interpretation. The final rule can be found here.