CFPB Updates Dodd-Frank Readiness Guide and RESPA-TILA Exam Procedures

• September 16, 2015
• Anna DeSimone

By Anna DeSimone
September 15, 2015, the Consumer Financial Protection Bureau (CFPB or Bureau) updated its Dodd-Frank Mortgage Rules Readiness Guide. The update was developed to help financial institutions come into and maintain compliance with the mortgage rules outlined in the Summary of the Rules in the Guide. The CFPB has designed this Guide for use by institutions of all sizes.

1. Summary of the Rules
2. Readiness Questionnaire

• Identify covered transactions?
• Identify transactions (such as reverse mortgages) for which you must continue to use the existing disclosures (GFE, initial and final TIL, and the HUD-1) under TILA and RESPA after the effective date of the Know Before You Owe rule.
• Establish requirements for pre-consummation, post-consummation, and tolerances?
• Require the provision of the Loan Estimate, the “Your Home Loan Toolkit: A Stepby-Step Guide” (i.e., the special information booklet), the Closing Disclosure, the post-consummation escrow cancellation notice (Escrow Closing Notice), and the post-consummation mortgage servicing transfer notice, and partial payment notice?
• Prohibit requiring consumers to submit documents verifying information related to the consumers’ applications prior to issuing a Loan Estimate (while still permitting consumers to voluntarily submit such documentation)?
• Provide for issuing revised Loan Estimates to reset tolerances, where permissible, within appropriate timeframes?
• Require disclaimers for written estimates provided prior to the consumer receiving the Loan Estimate?
• Restrict the imposition of fees (except for credit reports) in connection with a consumer’s mortgage loan application prior to providing the Loan Estimate and where consumer has not indicated an intent to proceed with the transaction?
• Require the retention of evidence of compliance for the required period of time?

• Outline the six pieces of information that constitutes the submission of an “application”?
• Describe what is necessary for a consumer to indicate an intent to proceed?
• Require that you deliver or place in the mail the Loan Estimate no later than 3 business days (days when your offices are open to the public for carrying out substantially all of your business functions) after application receipt and any revised Loan Estimate no later than 4 business days (all calendar days except Sundays and legal public holidays) before consummation (unless the consumer waives the review period due to a personal emergency)?
• Require that the Loan Estimate is completed in good faith and that any errors are within tolerance thresholds?
• Loan Estimate no later than 4 business days (all calendar days except Sundays and legal public holidays) before consummation (unless the consumer waives the review period due to a personal emergency)?
• Require that the Loan Estimate is completed in good faith and that any errors are within tolerance thresholds?
• Require that the disclosures are accurate, and that you limit the circumstances in which you may revise the Loan Estimate?
• Require that, no later than three business days after receiving the application, you must provide a written list of services for which the consumer may shop and identify at least one provider for each service? (Note: For services for which the consumer may shop, the consumer may choose a different provider than what is on the list).
• Require that a revised Loan Estimate or issuance of a new Loan Estimate comply with timing and other regulatory requirements?
• Require that a mortgage broker who provides the Loan Estimate must comply with all requirements?

• Require that the consumer receives the Closing Disclosure at least 3 business days (all calendar days except Sundays and legal public holidays) prior to consummation?
• Require that you provide a corrected Closing Disclosure, if necessary, that complies with the requirements for timing, corrections due to subsequent changes, and new 3- business-day review period, if applicable?

About the Author
Anna DeSimone is President and Founder of Bankers Advisory and Principal of CliftonLarsonAllen LLP. She can be reached at Anna@bankersadvisory.com

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