Before the Consumer Financial Protection Bureau (CFPB) released its 1,099-page proposed RESPA/Truth in Lending Act (TILA) integration rule in July 2012, no one knew what to expect. There was no certainty as to what changes the proposal would eventually bring to the industry. When the proposed rule was finally released, it was clear that not only will the industry be getting a new set of disclosure forms but that other significant regulatory changes are coming as well.
According to the CFPB, the final rule will be released this month. If the rule turns out to be identical to the proposal, there are some important issues that could bring about significant changes in the industry.
Those who believe this rule is just about new forms may not understand that the disclosures are only a portion of the regulation.
“It’s not just about the forms,” Robert Lotstein, managing attorney of LotsteinLegal PLLC told RESPA News. “With the RESPA/TILA disclosure integration rule, there are a lot of minefields because it is a more aggressive rule than people think.”
The minefields Lotstein was referring to include changes to the definitions of “application” and “business day,” new tolerance levels and modifications to changed circumstances.
“It sounds all good, but there are things that are troubling about it,” Lotstein said. “The rule is very different once you drill down and spend some time with it. People want to focus on the forms, and the forms have a lot of the utility, but it’s more than that, it’s also: when do the forms get triggered; what about changed circumstances; what about tolerances?
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