The Consumer Financial Protection Bureau is garnering praise from state regulators for streamlining the housing industry’s routine mortgage-origination disclosure forms.
The CFPB has spent the past year drafting, reviewing and testing various mortgage disclosure forms that will inevitably combine the Real Estate Settlement Procedures Act disclosure form with the Truth in Lending Act document.
The Conference of State Bank Supervisors in tandem with the American Association of Residential Mortgage Regulators, the American Council of State Savings Supervisors and the National Association of Consumer Credit Administrators lauded the merger of the documents, saying they’ve been calling for a more concise disclosure form for a while.
The point of the combined documents is to provide more clarity.
“The incongruent disclosure requirements, language, and definitions in RESPA and TILA have long been recognized by regulators, lenders, and consumers as problematic aspects of the mortgage origination process,” the regulators stated in their letter. “Developing a solution to streamline the requirements contained in the standards has been the focus of various proposals, studies, congressional hearings, and other public engagement. State regulators, for their part, have long felt the impact of the discrepancies while enforcing these statutes.”
Still, the regulators, like industry trade groups, advised the CFPB to tread lightly when creating requirements for the mortgage finance industry to ensure guidelines will not have the unintended effect of cutting off credit access.