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WBK Industry News - Federal Regulatory Developments

CFPB Updates Know Before You Owe in Small Entity Compliance Guide and the Guide to Forms

The CFPB has published on its website updated versions of the Know Before You Owe mortgage disclosure rule in the Small Entity Compliance Guide and the Guide to Forms.

The Small Entity Compliance Guide is version 4.0, dated October 2016, and provides updates to incorporate guidance from existing webinars to add clarity on topics, including:

  • Record retention requirements for the Closing Disclosure. (Section 2.3)
  • Completing the Loan Estimate and Closing Disclosure. (Sections 5.3 and 10.4)
  • Formatting the Loan Estimate and Closing Disclosure. (Sections 5.6, 5.7,10.11,13.3 and 13.4)
  • Delivery requirements for the Loan Estimate and the special information booklet. (Sections 6.5 and 15.7)
  • Requirements upon receiving an application. (Sections 6.7, 6.9, 6.10 and 6.11)
  • Disclosing and determining good faith for services the borrower may shop. (Sections 7.4, 7.6 and 8.8)
  • Disclosing seller-paid costs and providing seller disclosures. (Sections 10.7, 11.5, 11.6 and 11.7)
  • Providing revised Loan Estimates and corrected Closing Disclosures. (Sections 12.3 and 12.6)
  • Guidance on construction loans.
  • Providing special information booklet. (Section 15.1, 15.6 and 15.7)
  • The absence of a HUD-1 comparison chart in the Closing Disclosure. (Section 10.12)
  • Additional guidance on providing revised Loan Estimates any time before the Closing Disclosure. (Section 8.1)
  • Revisions to standardize the terminology for “revised Loan Estimates” and “corrected Closing Disclosures.” 2 CONSUMER FINANCIAL PROTECTION BUREAU
  • Revisions to move existing questions to place them next to other questions on related topics. (Sections 6.8 and 8.1) and miscellaneous administrative changes.

Guide to Forms is version 1.4, dated October 2016, and provides updates to incorporate guidance from existing webinars and guidance, including additional clarification on:  

  • The Loan Estimate in the General Information, Loan Terms, Projected Payments Table, Loan Costs, Other Costs, Adjustable Payment Table, Adjustable Interest Rate Table, Contact Information and Other Considerations sections.
  • The Closing Disclosure in the General Information, Projected Payments Table, Loan Costs, Other Costs, Loan Disclosures, Escrow Disclosures and Other Disclosures sections. Also, miscellaneous administrative changes.

The documents can be accessed on the TILA-RESPA implementation webpage.