The Homebuyers Assistance Act, which received bipartisan support in the House, clearly defines the “hold harmless” period of TILA-RESPA Integrated Disclosure to end on Feb. 1, 2016. There’s already a nebulous, undefined grace period in the recently implemented Consumer Financial Protection Bureau law, but Congress wants to give lenders a definite “safe harbor” period for those making a “good-faith” effort to comply. There’s a long list of professional organizations and associations that support the legislation.
On November 20, 2013, the CFPB finalized TRID, which combined certain disclosures that consumers receive in applying for and closing on a residential mortgage loan, including disclosures required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). The effective date for the final rule was originally set for mortgage applications received on or after August 1, 2015, but due to “administrative errors,” the CFPB delayed the effective date until October 3, 2015.
The settlement process is an integral piece of a real estate transition, so any glitch or delay in the process affects buyers and sellers and all parts of the real estate industry, including realtors, bankers, homebuilders, and title companies. Almost 300 Senators and House Members wrote the CFPB to request a formal hold-harmless period.
H.R. 3192 does not delay implementation of the TRID rule, but rather, provides a temporary safe harbor to those who are making a good faith effort to comply until February 1, 2016.
However, the White House plans to veto the bill, calling it an “unnecessary delay,” according to HousingWire. That’s a pretty interesting stance to take on something that came out of the House Financial Services Committee with support from both sides of the aisle.
The CFPB has already clearly stated that initial examinations will evaluate good faith efforts by lenders. The Administration strongly opposes H.R. 3192, as it would unnecessarily delay implementation of important consumer protections designed to eradicate opaque lending practices that contribute to risky mortgages, hurt homeowners by removing the private right of action for violations, and undercut the Nation’s financial stability.
If the President were presented with H.R. 3192, his senior advisors would recommend that he veto the bill.
What do you think of the White House’s stance on extending the “hold harmless” period to next year?
