CFPB Allows Grace Period for New Rule Rollout
RE/MAX Applauds Move Providing Homebuyers Less Disruption
DENVER – June 4, 2015 – (RealEstateRama) — Today, the Consumer Financial Protection Bureau (CFPB) announced that it will be “sensitive” to the good-faith efforts of lenders implementing the new Truth-In-Lending and Real Estate Settlement Procedures Integration Disclosure (TRID) regulations set to take effect on August 1.
CFPB Director Richard Cordray made the announcement in a letter delivered to Congress this morning. He stated that the CFPB “approach is intended to ease concerns we have heard about this transition to new processes in the coming months . . . and that we listen closely and consider carefully how we can best address the issues you raise as we all pursue this important advance in consumer protection . . .”
Cordray was responding to a letter he received last week from a bipartisan group of over 250 members of Congress, who felt that the industry did not have sufficient time to properly test new procedures that will impact every mortgage application and real estate closing.
RE/MAX CEO, Chairman and Co-Founder Dave Liniger also had a personal letter delivered to Director Cordray last month requesting a grace-period in the name of all the homebuyers impacted by such sweeping industry changes.
“We are very grateful to the CFPB and Director Cordray for responding favorably to our serious concerns from a real estate perspective,” said Liniger. “And we’re glad they recognized the huge impact this will have on consumers at a peak time in the home-buying season. A good-faith grace period will provide a much smoother transition and benefit everyone involved.”
The 1,100-page TRID rule was first published by CFPB in November 2013 and an August 1, 2015 date was set for implementation. As a direct result of the Dodd-Frank Act, the TRID rule seeks to protect consumers from predatory lending practices and provide clear disclosures on the mortgage borrowing and closing process.
The new TRID rules are still set to take effect with all new mortgage applications taken beginning on August 1. Mortgage lenders and closing service providers will employ new forms, timelines and processes to meet the TRID requirements. Initially, CFPB expects lenders to make a good-faith effort to comply.
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