Title companies and lenders who are bracing for one of the biggest shake-ups of the mortgage industry in decades may have a couple more months to prepare.
The director of the Consumer Financial Protection Bureau announced a proposed amendment to push the effective date of the new mortgage disclosure rules from August 1, 2015 to October 1, 2015.
The proposed amendment is up for public comment, and a final decision will be made afterwards; however, for all intents and purposes the new effective date is now October 1, 2015.
The CFPB discovered an “administrative error” in meeting the requirements of federal law, which ultimately resulted in the effective date being pushed into the fall.
In a statement issued yesterday regarding the Know Before You Owe mortgage disclosure rule, Director Richard Cordray said:
“The CFPB will be issuing a proposed amendment to delay the effective date of the Know Before You Owe rule until October 1, 2015. We made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”
Implementation of the new mortgage disclosure rules is expected to cost settlement service providers $67.8 million and lenders $207 million over the next five years, bringing the total cost to $1.3 billion.
Representatives from the American Land Title Association, American Bankers Association and Finance Policy Center for the Urban Institute testified before Congress last May, asking for a “hold harmless” period through the end of this year.
So far efforts to establish a hold harmless period have been unsuccessful, while the proposed amendment is expected to go final shortly.