The presentation of closing costs on simplified mortgage loan disclosure forms proposed by the Consumer Financial Protection Bureau is inconsistent with tolerance requirements currently in place under the Real Estate Settlement and Procedures Act (RESPA), the Mortgage Bankers Association says in asking the bureau to meet with industry representatives "as soon as possible."
Lawmakers have directed the CFPB to draw up a simplified loan disclosure form that will replace the separate forms borrowers are currently provided to satisfy requirements of RESPA and the Truth in Lending Act (TILA). Lenders and groups representing consumers and the real estate industry have complained that having two sets of loan disclosures is confusing to borrowers.
The CFPB received more than 13,000 comments on the first two draft proposals it put forward, and has sought additional feedback on two new versions put forward on June 27.
The first two draft forms were focused on loan terms like interest rate. The latest prototypes — labeled "Redbud" and "Dogwood" for discussion purposes — focus on closing costs.