CFPB Proposed Rule - Your Comments Are Important

The Consumer Financial Protection Bureau's (CFPB) proposed rule supplementing the new Loan Estimate and Closing Disclosure requires the lender to provide the consumer with the Closing Disclosure at least three business days before the loan closing.  When changes occur to borrower closing expenses, unless the changes qualify for one of the CFPB's enumerated exemptions, the Closing Disclosure must be revised and closing delayed another three days.

Because the CFPB realized that certain circumstances more frequently give rise to last minute closing costs modifications, the proposed rule lists the following exemptions:

1. Changes from buyer/seller negotiations;
2. Minor increases in amount paid totaling less than $100;
3. Changes occurring after consummation solely by action of government entity;
4. Changes due to non-numeric clerical errors corrected within 30 days; and
5. Refunds of tolerance violations.

As agents in the field, Fund members are well aware that real estate closings can be extremely unpredictable. Frequently, unforeseen circumstance may affect the timing of and expenses related to closing.  In today's real estate transaction environment, title perils such as pending foreclosure, bankruptcy, gap risk, short sales, open permits and a variety of other factors inhibit the closing agent's and lender's ability to nail down closing costs in advance of closing. 

Consider your past experience with volatility of closing costs in advance of closing and share your real life war stories with the CFPB.  Don't miss your opportunity to enlighten the CFPB concerning the need for additional exemptions to re-disclosure under the three business day rule.  Public commentary on the proposed rule is being accepted by the CFPB until November 6th.  More information and a link to provide comments to the CFPB can be found at www.thefund.com/Member/Resources/Consumer-Financial-Protection-Bureau.aspx