CFPB Delays TRID until Oct. 1

In the News

By Frank Pellegrini, Prairie Title CEO           

The Consumer Financial Protection Bureau announced late yesterday that it is proposing a two-month delay in enforcing the new TILA-RESPA Integrated Disclosure (TRID) process due to an “administrative error."

While we felt confident we would be fully prepared for the August 1 implementation date, we welcome this news which gives the entire real estate industry additional time to get ready for this major change in the way we all do business.

The American Land Title Association published a statement today on the delay which you can read here. For my part, I would emphasize three ways in which the delay in enforcement could help.

• CFPB now has more time to act upon a serious flaw in the wording of TRID docu-mentation by removing the “optional” label attached to owner’s title insurance. Telling a consumer that owner’s title insurance is “optional” will mean that homebuyers may be dissuaded from purchasing the same protection that lenders receive from a title insurance policy. The CFPB’s disregard of the protection afforded by an owner’s title insurance policy is a disservice to the consumers they represent. It should be removed.
• Director Cordray and the CFPB staff should use this additional time to fix the inaccurate disclosure of title insurance premiums for consumers. State laws, customs and regulations in the majority of the United States dictate the amounts that consumers must pay for title insurance. The CFPB Rule creates a “one-size-fits-all” formula to calculate title charges. In most areas, use of this formula results in erroneous disclosure. All homebuyers should be well-informed about the accurate costs of homeownership — including what they pay for each service during the real estate closing process. The Rule should encourage disclosure of the actual charges, not the product of a faulty formula.
• The change not only gives the industry more time to prepare, it also moves the enforcement date beyond the beginning of the school year, typically a very busy time for consumers. As CFPB Director Richard Cordray said in his statement about the delay: “We further believe that the additional time included in the proposed effective date would better accommodate the interests of the many consumers and providers whose families will be busy with the transition to the new school year at that time.”

 

Yesterday’s announcement is good news for real estate services providers and, most importantly, for consumers. Regular readers of In The News know that I do not oppose the changes our industry is undergoing, and the extra time will help smooth the transition process. That’s good news for all.

 

Let’s keep the conversation going. Call or email me: 708-386-7900; frank@prairietitle.com.