The House of Representatives recently voted to pass a bipartisan bill to provide a “hold harmless” grace period for Boston North Shore mortgage lenders for the implementation of the Consumer Financial Protection Bureau’s (CFPB’s) TILA-RESPA Integrated Disclosure (TRID) Rule. The new rule went into effect October 3rd.
“Good Faith” From Boston North Shore Mortgage Lenders
Extending the grace period until February 1, 2016, the Homebuyers Assistance Act ensures mortgage lenders protection from compliance enforcement if they exhibit a food faith effort to adhere to the TRID rules and regulations.
Although the Homebuyers Assistance Act passed win the House Financial Services Committee the White House tried to veto it. Issuing a statement, the White House wrote “The Administration strongly opposes (the Act,) as it would unnecessarily delay implementation of important consumer protections designed to eradicate opaque lending practices that contribute to risky mortgages…”
House leaders commend the bill as a means of facilitating lenders’ ability to provide financing for prospective home owners. One House member said, “There is no reason that CFPB regulations should prevent homebuyers from being able to buy and close on a home.” Other leaders echoed those sentiments by acknowledging the bill would assist Boston North Shore mortgage lenders in avoiding loan closing delays or difficulties — calling them “bureaucratic delays” that should not add to the stress off buying a home.
The move comes as an answer to many mortgage lenders’ requests for additional time to ensure full compliance with the new rules and regulations required by TRID. Allowing a formal hold-harmless period while Boston North Shore mortgage lenders can, in good faith comply with the requirements, will result in minimal impact on consumers and their residential home mortgage loan closings.
The sponsor of the bill, Rep. French Hill (R-Arkansas) noted the legislation was brought about to allow for more clarity on the CFPB’s TRID rule and that “the stories he and his colleagues have heard regarding efforts to comply, and lingering uncertainty on several aspects of the rule.” Extending a grace period will help guarantee access to mortgage credit by enabling Boston North Shore mortgage lenders the opportunity to prepare for full compliance without fear of penalty.
In addition to the recent House action, the Federal Housing Administration (FHA) recently joined the CFPB, Fannie Mae and Freddie Mac in establishing a grace period for the enforcement of the TRID Rule. Unlike the open-ended grace period granted by Fannie Mae and Freddie Mac, the FHA’s grace period expires on April 16, 2016. All three agencies specifically warned the grace period should not be utilized as an excuse by Boston North Shore mortgage lenders or others to ignore the CFPB’s new regulations.
With the actions of Fannie Mae, Freddie Mac and the FHA, an effort is now in process in Congress to finalize a formal grace period for TRID enforcement by the CFPB.
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