The Texas Disclosure (T-64) is an addendum to the new federal Closing Disclosure form. On October 3, 2015, the Texas Department of Insurance (TDI) will require settlement agents to use the Texas Disclosure in addition to the Closing Disclosure Form.
Why another form?
TDI states in the Commissioner’s Order 4038:
Some of the changes in the Closing Disclosure conflict with Texas closing requirements and practices. When the CFPB integrated the HUD-1 and the final Truth-in-Lending disclosure to create the new Closing Disclosure, it removed or combined items that were listed individually on the HUD-1. For example, the current HUD-1 includes a section to disclose portions of the real estate commission paid to third parties, but the Closing Disclosure does not. The Texas Disclosure will require agents to list portions of the premium or real estate commission paid to third parties. The Texas Disclosure requires settlement agents to separately itemize other fees and charges paid to the real estate agent that may have been aggregated on the Closing Disclosure. The Texas Disclosure also adds a signature line, authorizing the settlement agent to disburse the funds.
In addition, the Texas Disclosure is necessary to show the actual price for title insurance in a simultaneous-issue transaction in Texas. In approximately half the states, including Texas, title companies offer a discount on the loan policy when both a loan policy and an owner’s policy are purchased in a single transaction. However, the instructions for the Closing Disclosure require the agent to list the loan policy at the full, undiscounted premium and to show the simultaneous-issue discount as if it applied to the owner’s policy instead. In Texas and other states, this requirement will cause the owner’s and loan policy premiums on the Closing Disclosure to differ from the actual amounts charged for each policy. This scenario becomes even more confusing for consumers in Texas, as well as in 30 other states, where the seller pays, or is likely to pay, for the owner’s policy. Because the Closing Disclosure requires the agent to apply the simultaneous-issue discount to the owner’s policy rather than the loan policy, the form will inaccurately state the seller’s contribution to the title insurance costs. Further, by showing the higher-priced full loan policy amount rather than the discounted loan policy amount, the borrower’s cash-to-close number in the Closing Disclosure is rendered inaccurate and overstated.
For additional information on the T-64 click below:
Texas Disclosure T-64
The House Financial Services Committee annual report from Richard Cordray, director of the Consumer Financial Protection Bureau, on Tuesday morning.
When Director Cordray was asked about whether the CFPB will implement a grace period for lenders dealing with the new requirements of the TRID rule, Cordray responded by saying the CFPB will have an informal grace period “for some period of months, I’m not going to be specific here … will be diagnostic not punitive.”
To read Director Cordray’s entire testimony click below:
Financial Services Committee Testimony
On August 5th the CFPB issued a report on their e-closings pilot stating that consumers reported a better understanding of their closing documents when utilizing e-closings. Giving the consumer the ability to review documents before closing allows for time for questions to be addressed prior to sitting down at the closing table. Read more on the CFPB study by clicking on the link below:
e-closing study results
The Consumer Financial Protection Bureau announced the new members of industry advisory boards on Friday. To read more click below:
Industry Advisory Board Members
CFPB Finalizes Two-Month Extension of Know Before You Owe Effective Date
WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today issued a final rule moving the effective date of the Know Before You Owe mortgage disclosure rule, also called the TILA-RESPA Integrated Disclosures rule, to October 3, 2015. The rule requires easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer. The Bureau issued the change to correct an administrative error that would have delayed the effective date of the rule by at least two weeks, until August 15, at the earliest.
The Bureau is finalizing Saturday, October 3 as the effective date. The Bureau believes that moving the effective date may benefit both industry and consumers with a smoother transition to the new rule. The Bureau further believes that scheduling the effective date on a Saturday may facilitate implementation by giving industry time over the weekend to launch new systems configurations and to test systems. A Saturday launch is also consistent with industry plans tied to the original effective date of Saturday, August 1.
The final rule issued today also includes technical corrections to two provisions of the Know Before You Owe mortgage disclosure rule.
A copy of the final rule is available here:http://files.consumerfinance.gov/f/201507_cfpb_2013-integrated-mortgage-disclosures-rule-under-the-real-estate-settlement-procedures-act-regulation-x-and-the-truth-in-lending-act-regulation-z-and-amendments-delay-of-effective-date.pdf