In part one of this two-part series, RESPA News reviewed the history of average charges and the current law. In part two we discuss the average charge requirements contained in the Consumer Financial Protection Bureau’s (CFPB) final integrated RESPA/Truth in Lending Act (TILA) mortgage disclosure rule and state law concerns.
CFPB final rule
When the CFPB released its final RESPA/TILA integrated mortgage disclosure rule in November 2013, it retained the U.S. Department of Housing and Urban Development’s (HUD) average charge exception.
The bureau said it does not expect lenders or settlement service providers to engage in a cumbersome statistical analysis when determining whether the transaction class is based on an appropriate geographic area and loan type. However, the agency did not believe it to be unreasonably burdensome for lenders or providers to assess whether a geographic area or loan type are defined using a subgroup with distinct cost characteristics.
“The average cost pricing rules are not requirements, but are intended to provide creditors flexibility from the general requirement that the actual amount imposed on the consumer may not exceed the amount received by the settlement service provider,” the bureau said.
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