Editor’s note: This story has been corrected to clarify that the the Federal Reserve Board is not dropping planned changes to rules governing loan officer compensation, which will take effect April 1. The story had previously been updated to include comments from mortgage industry groups.
The Federal Reserve is backing down from a slew of proposed changes to mortgage loan disclosures, saying authority in that arena will soon be transferred to the new Consumer Financial Protection Bureau.
The Fed’s proposed changes to mortgage loan disclosures were over a year in the making, prompted by criticism that homebuyers often didn’t understand the true cost and terms of mortgages taken out during the boom.
The situation was complicated by the fact that borrowers get two sets of federal mortgage disclosures: one addressing Truth in Lending Act (TILA) requirements, and the other satisfying requirements of the Real Estate Settlement Procedures Act, or RESPA.