Enforcement grace period for good-faith efforts on New Integrated Disclosure Requirements

GREAT NEWS!  Berkshire REALTORS joined colleagues nationwide in Washington in May to ask our legislators for a grace period of enforcement (lender fines) for issues that may arise when implementing the new RESPA TILA regulations that go into effect 8/1/5.  They listened!  The Consumer Financial Protection Bureau will not delay implementing the new TILA-RESPA Integrated Disclosure requirements that go into effect Aug.1… but there will be an enforcement grace period for good-faith efforts made.  The REALTOR association, mortgage industry and a bipartisan coalition in Congress have been asking the CFPB for this for months. This is great news, as we work through the kinks of new regulations designed to protect consumers – honoring the good faith of lenders to comply with the mandates while allowing the process to be tested before heavy fines are levied.

According to the HousingWire, “The TRID rule, which was brought forth by the CFPB, has a sweeping impact on the real estate market through the implementation and compliance costs it requires.  CFPB Director Richard Cordray sent a letter to Congress members Wednesday morning, officially announcing the TRID enforcement grace period. RESPA_TILA_delay Letter

David Stevens, chairman and CEO of the Mortgage Bankers Association said “Essentially if an institution is working in all good faith to implement the rule, the regulatory framework in this country will use what they can to provide instructive guidance during this delay period.  This is a vast system of integrated service providers that spreads far beyond just lenders – there are servicing companies, real estate companies and third-party vendors who all have to make sure their systems are compliant and coordinated with each other.”

An American Bankers Association survey found that while 74% of banks are using a vendor or consultants to assist with TRID implementation, only 2% of the compliance systems had been delivered by the month of April. Nearly eight in 10 banks (79%) couldn’t verify a precise delivery date or were told they wouldn’t receive systems before June.

Locally, the Berkshire lenders have been in communication with the Board of REALTORS and are participating in an education session designed to help REALTORS guide clients through this process. We are tentatively looking at a date of Wednesday July 8th for this event, and will get back to members with a firm “save the Date” in the next week, and more information within the next few weeks.

Thanks to all in the REALTOR association and the Mortgage Bankers Association for helping spread this important message and getting this passed.