For decades we have had to explain the differences to homebuyers between the Truth in Lending Act and the Real Estate Settlement Procedures Act. Both overlap but have been inconsistent for years. The combination of these has formed the TRID - the RILA / RESPA Integrated Disclosure Rule. The Consumer Financial Protection Bureau has modified the rules in this final document however, the most recent news is that the CFPB failed to file some crucial paperwork and therefore has delayed the entire process out two months.
According to the CFPB website "The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time." [Source]
The irony is that they are trying to make this easier for everyone and in doing so, made a very simple clerical error that has delayed it for everyone. It essentially saying that now that we are all prepared and ready to go, we now have more time due to their mistakes. The new mortgage disclosures are nearly 1900 pages but because the bureau's failure to file the required two page form with the Congress on time, there's now a forced delay of the effective date.
This might seem like an administrative error however, many people are talking about if this will create some grace later on. We all know how it is with the government; if they make a mistake they seem to have no consequences, however, if we make a mistake or miss a payment, it's severe penalties and fines. A lot of people are talking about the consideration that lenders might receive if they ever miss a deadline.
By law, Congress can use this two-month window to vote on a joint resolution disapproving a submitted rule, only after it has passed both houses of Congress. Any changes that are made during this time up until October 1 can be re-voted on however, it will only delay the effective date out further.
Prior to this, the CFPB has said that it will be sensitive to good-faith efforts by lenders to implement this new disclosure rule, which is now going into effect October 1 instead of the original date of August 1. However, nothing was mentioned about a formal grace period, only that they would be "sensitive" to discrepancies.
The biggest irony is that nearly 300 members of Congress had pushed for the delay or offer a grace period for companies however, that grace period is now forced due to a simple clerical error.
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