The comment to § 1026.19(e)(1)(ii) relates the idea that "the creditor must ensure that disclosures provided by mortgage brokers comply with all requirements of [the Loan Estimate disclosures]." By pinning the responsibility of providing the LE on the creditors, even if it's the broker taking the application, interesting issues arise; including but not limited to the following questions: (1) How will the lender know when the broker has received an application that the broker plans on presenting to the lender? (2) How will the broker know what the Lender's current rates or other bits of information to provide the consumer with an accurate LE within three days time? Or, (3) can the lender just issue a revised LE if the one issued by the broker is inaccurate?
August 18, 2014
Did You Know Series: CFPB eRegulation Comparisons
Regulation Z, § 1026.19(e)(2)(iii) states "The creditor or other person shall not require a consumer to submit documents verifying information related to the consumer's application before providing the [Loan Estimate] disclosures required by (e)(1)(i) of this section. The commentary to this also states that the creditor "may
collect from the consumer any information that it requires" in conjunction with collecting the consumer's application information; however, "the creditor is not permitted to require
, before providing the [Loan Estimate], that the consumer submit documentation to verify the information collected from the consumer." The commentary illustrates this with the example: "a creditor may require the sale price and address of the property, but the creditor may not require the consumer to provide a purchase and sale agreement to support the information the consumer provides orally before the [Loan Estimate]."
August 13, 2014
Did You Know Series: Special Information Booklets
Many IDS Customers already know that the CFPB has launched a more user-friendly regulation website that currently includes 12 CFR § 1005 (Reg E) and 12 CFR § 1026 (Reg Z). The website address is http://www.consumerfinance.gov/eregulations/
. Besides sporting an easier-to-read contemporary design, there are some new features that create additional functionality that IDS Compliance has determined could save some mortgage compliance professionals hundreds of hours of time.
One not-so-readily-apparent feature that IDS Compliance is really fond of is the "COMPARE THIS WITH" feature that clearly shows changes made between two compared versions of the same regulation. Seeing changes parts of the reg side by side creates clarity when trying to discern exactly what's new and when trying to understand the intent of the regulation writers. Here's how to take advantage of this feature using the current version of Reg Z compared with the August 1, 2015 version of Reg Z that implements the TRID changes.
August 4, 2014
Each of these books is required under regulatory authority. And the organization which has received authority over the regulations that require these consumer-oriented booklets is none other than the Consumer Financial Protection Bureau (CFPB). Here's a little about each booklet:
1. The CHARM booklet is required pursuant to Regulation Z, § 1026.19(b), which states that any time "the annual percentage rate may increase after consummation in a transaction secured by the consumer's principal dwelling with a term greater than one year, the following disclosures [the CHARM booklet and others] must be provided at the time an application is provided or before the consumer pays a nonrefundable fee, whichever is earlier." This booklet was originally prepared by the Board of Governors of the Federal Reserve System and the Office of Thrift Supervision. The CFPB has basically adopted it almost "as is" for now; however, the CFPB has stated that it will change to be aligned with the CFPB's other resources and tools geared towards the CFPB's mission to educate consumers.