The TILA-RESPA Know Before You Owe Rules were a game-changer for our industry when implementation was required in October of 2015. Like all new regulations, there are always questions that bubble up and require further clarification. The CFPB collected those concerns and issued a proposal for comment earlier this year. After the comment period, they adopted changes to the Know Before You Owe Rules in July of 2017 and made these changes effective October 1, 2018. The updates have just been added to the Know Before You Owe Guide, which is used by compliance professionals (in addition to their legal counsel) to ensure that their company is following the rules.
I’m sure that most of you received training on this regulation when it became mandatory in 2015. However, like all regulations, it is important to keep up to date, to ensure that your policies and procedures are sound. I’m attaching resources below for you to read if you need further clarification on any of the bullet points.
The “Executive Summary of Changes” was released on July 7, 2017 and is a 12-page overview of what changed.
The just-released 144 Guide to TILA-RESPA, is the latest updated version released on December 7, 2017.
Following are some Highlighted changes:
- Tolerance provisions for “Total of Payments.”
- Housing Assistance Lending (non-profit lenders) are allowed to charge recording fees and transfer taxes without losing their partial exemption for the use of disclosures.
- Co-Ops were added as a covered transaction. Previously the law stated that only properties considered “real property” applied. In the case of Co-Ops that was sometimes true and sometimes not true, so this was clarified.
- Sellers can receive a copy of the consumer CD IF it contains seller information.
- Inclusion of Trusts in the disclosure rule.
- Multiple clarifications of disclosure rules for New Construction, particularly Construction to Perm loans and phases of completion. If you work with new construction, read through those!
- Handling construction inspection charges in the disclosures.
- Disclosure of mortgage insurance payments and escrow payments in projected payment tables.
- Simultaneous subordinate lien loans.
- Revised tolerances for total of payments.
- Clarifies the “good faith” standards when providing loan estimates.
- Decimal places and rounding.
- Calculation cash to close.
- Clarifications on “written list of providers.”
And this is just a starter list of changes. It is important to note that your company has likely taken care of all of this since these changes were required to take effect October 1, 2018. Yet, I will bet that some companies are still trying to figure it out!