CFPB tweaks 2 consumer notifications in mortgage disclosure rule

January 21, 2015

WASHINGTON (1/22/15)--Minor modifications to rules governing when consumers receive loan information were finalized Tuesday by the Consumer Financial Protection Bureau (CFPB).

The rules were first proposed in October and address when consumers will receive updated disclosures after locking in an interest rate, and how consumers receive information regarding certain construction loans.

Federal law required mortgage lenders deliver two different, overlapping disclosures to consumers within three business days after receiving a mortgage application. Dodd-Frank transferred responsibility for the forms to the CFPB, and the bureau introduced new mortgage disclosure forms in 2013 to replace the existing federal forms.

One change requires creditors provide a revised Loan Estimate within three business days after a consumer locks in a floating interest rate. The original rule required creditors to provide the revised Loan Estimate on the date the rate is locked.

The second change creates a space on the Loan Estimate form where creditors could include language informing consumers that they may receive a revised Loan Estimate for a construction loan that is expected to take more than 60 days to settle.

Both changes are part of the bureau's Truth in Lending Act-Real Estate Settlement Procedures Act Integrated Disclosure rule, which becomes effective Aug. 1. According to the CFPB, it does not anticipate that the modifications will affect the industry's ability to come into compliance with the rules.

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