NAMB and CAMP is proud to participate in the rule making process for the combined GFE/TILA implementation by representing small business, mortgage professionals, and preservation and promotion of consumer choice. However, we cannot do it alone….we need your feedback… Please review the questions below, copy and past them, and email your responses to email@example.com
1) Broker Compensation disclosed is GFE
a. As a broker, when you disclose a transaction with lender paid compensation as a charge and a credit, do you find consumers are confused?
i. Please provide examples
b. How much time does it take to explain the lender paid compensation as a charge and a credit to the consumer?
c. If consumers were to truly have the ability to compare GFE’s between various companies (brokers vs banks), would you recommend lender compensation not be disclosed on the GFE, but rather a separate disclosure?
i. Why or why not?
ii. Do you have any alternative recommendations?
iii. Please review the conclusion of the FTC study which found the disclosure of YSP confused consumers to choose higher cost loans
2) The Dodd-Frank Act requires the CFPB to integrate TILA mortgage disclosures with RESPA’s Good Faith Estimate (GFE) and HUD-1 Settlement Statement.
a. If you had to revise your GFE and HUD-1 forms as a result of the RESPA rule changes that went into effect in 2010:
i. What actions were required to revise or update your processes and systems?
ii. How much did these changes cost?
iii. How long did the changes take to implement?
iv. What would be your normal schedule for the next update of these processes and systems?
b. Do you expect that the number of staff hours expended and the cost of external services and products sought as a result of the proposals under consideration would be comparable, higher, or lower than the costs attributable to the changes in the 2010 RESPA rule?
c. Once the initial changes are made, do you expect the type and amount of your ongoing compliance costs to be the same, greater, or less than they were before the new forms?
3) with regards to the combined respa/tila disclosures, there is concern that the lender should be responsible for filling out and disclosing to the borrower.
a. What would the impact be to your business if only the lender could issue the combined GFE/TILA to the consumer?
b. What would the impact be to the consumer if only the lender could issue the combined GFE/TILA?
c. Would you expect the impact would be in terms of time, costs, compliance to the mortgage origination process?
4) Changes is settlement costs / redisclosure – (Change of Circumstance)
a. Currently, in what percentage of loan transactions do you revise and reissue GFEs to reflect changed circumstances or increases in the fee amounts?
i. On average, for each mortgage transaction in 2011, how many times did you reissue a GFE as a result of changed circumstances or for other reasons?
ii. What are the most common reasons for issuing a revised GFE?
iii. On average, how much does it costs to reissue a revised GFE, including costs associated with documenting changed circumstances?
b. If only the lender could issue the combined GFE/TILA and a change of circumstance occurred, how would this impact your consumers?
c. If only the lender could issue the combined GFE/TILA and a change of circumstance occurred, how would this impact your business processes?
5) The Settlement Disclosure would be provided at least 3 business days before closing and would replace the final TIL and HUD-1.
a. What would the impact be to consumers if they could not close until 3 days after the settlement disclosure were issued?
b. What changes in your processes and systems, if any, would be required to comply with such a requirement?
i. Would these changes result in additional costs?
ii. If so, please describe the type and amount of cost?
c. Are there any charges or fees that generally cannot be determined in time to provide the Settlement Disclosure 3 business days before closing? If so, please describe them, and identify the reasons why such information may not be known yet know by that time.
d. Would the proposal affect the ability to schedule settlements or close loans as planned?
6) Under TILA and RESPA, a lender is not required to provide the early TILA disclosure and GFE until it has received an application. The CFPB is considering a proposal that would amend the current definition of loan application to constitute receipt of 6 items: borrower’s name, income, SSN, property address, property value, loan amount:
a. Would you be able to issue an accurate Loan Estimate based only on the first six elements of the definition of loan application set forth above?
7) The CFPB is considering requiring that copies of all Loan Estimates and Settlement Disclosures provided to the borrower be maintained in a standard, machine-readable, electronic format.
a. Do you currently retain copies of TILA or RESPA disclosures provided to loan applicants?
i. If so, in what format do you maintain those records (i.e., paper or electronic)?
ii. If electronic, please describe the format or system used to retain records.
b. If the electronic recordkeeping requirements were adopted in a final rule, what specific actions would you need to take initially to comply with the requirements?
i. How much would the initial compliance actions cost?
ii. What do you expect would be the effect on your ongoing recordkeeping costs?
c. Which entity involved in the transaction do you believe is best positioned to electronically maintain records of the disclosures provided, and why:
i. The lender
ii. The mortgage broker
iii. The settlement agent
Are there any feasible alternatives to the proposals under consideration that would minimize any significant economic impact on your business while accomplishing the CFPB’s statutory mandate and objectives?
9) Are there any other federal rules that you believe may duplicate, overlap or conflict with the proposals under consideration?
10) The integration of TILA/RESPA is part of the Paperwork Reduction Act.
a. Did the previous change to the GFE reduce the paperwork burden for individuals and small business?
b. Do you feel the proposed changes will reduce the paperwork burden for individuals and small business?