The National Association of Realtors secured a victory in the changes announced Friday to the much-anticipated Consumer Financial Protection Bureau Know Before You Owe rule.
NAR first reached out to the bureau in a letter at the beginning of June that identified three issues its members were experiencing with TRID, along with suggestions to fix those issues that could be included in the coming rule adjustments.
One of those issues was on the rules around allowing lenders to share the Closing Disclosure form with “third parties” after receiving consent from the consumer.
In the letter, NAR explained that prior to the implementation of TRID, real estate agents helped their clients by answering questions about the HUD-1 form and reviewing terms agreed to in the sales contract including concessions, escrows, commissions and shares of prorated taxes.
While the form was routinely shared with agents in nearly all transactions before TRID, more than half of real estate agents surveyed said they have had “problems” getting access to the Closing Disclosure form since the implementation of TRID in October.
As a result, National Association of Realtors President Tom Salomone said that real estate professionals are even more likely to have issues getting access to the Closing Disclosure when settlement is delayed.
“This is an unintended consequence of the rule that needs clarification from the CFPB,” Salomone wrote in the letter. “NAR urges the CFPB to include language in the proposed rule stating that it is just as acceptable now as it was before Know Before You Owe for a lender to share the CD with third parties if the lender receives a consent form from the consumer.”
Today the bureau made public the changes it is proposing to the rule, and those show that the bureau listened to NAR’s request, as seen in this change:
Privacy and sharing of information:
The rule requires creditors to provide certain mortgage disclosures to the consumer. The bureau has received many questions about sharing the disclosures provided to consumers with third parties to the transaction, including the seller and real estate brokers. The bureau understands that it is usual, accepted, and appropriate for creditors and settlement agents to provide a closing disclosure to consumers, sellers, and their real estate brokers or other agents.
What this means:
The bureau is proposing additional commentary to clarify how a creditor may provide separate disclosure forms to the consumer and the seller.
Commenting on the new proposal, Salomone said, “Realtors have reported challenges gaining access to the Closing Disclosure ever since TRID went into effect, despite a long history of access to the substantively similar HUD-1. Today the CFPB acknowledged that concern by making it clear that it is appropriate and accepted for creditors and settlement agents to share the CD with consumers, sellers, and their agents.”
“That’s a significant victory that will help Realtors continue to provide the expert service their clients have come to expect. We appreciate the CFPB’s willingness to reconsider the TRID-related challenges our members face and will continue to monitor the progress on this important issue in the months ahead,” he continued.
Since the proposal is fresh, NAR noted that they “are continuing to review the proposed rule and will work with the CFPB to see these issues addressed when the rule comes out later this year.”
