Alert

August 1, 2016

CFPB Proposes Amendments to "Know Before You Owe" Mortgage Disclosure Rule

On July 29, 2016, the Consumer Financial Protection Bureau announced a proposed rule that amends the Bureau's "Know Before You Owe" mortgage disclosure rule. The proposed amendments memorialize certain past informal guidance issued by the Bureau and make additional clarifications and technical amendments. Among the various amendments, the Bureau notes the following proposed changes:

• Tolerances for the total of payments. The Bureau proposes to establish tolerances for the total of payments that parallel existing tolerances for the finance charge and disclosures affected by the finance charge.
• Partial exemption affecting housing assistance lending. The existing rule provides a partial exemption for certain housing assistance loans. The Bureau proposes to amend the rule to clarify that recording fees and transfer taxes may be charged in connection with those loans without losing eligibility for the partial exemption. In addition, recording fees and transfer taxes would be excluded from the exemption's limits on costs.
• Cooperative units. The Bureau proposes to extend the rule's coverage to include transactions involving cooperative units regardless of whether cooperatives are classified as real property under state law.
• Privacy and information sharing. The Bureau proposes to incorporate and expand upon previous webinar guidance concerning the sharing of disclosures with sellers and various other parties by additional commentary clarifying how a creditor may provide separate disclosure forms to the consumer and the seller.

Comments on the proposed rule must be received by October 18, 2016.