Recent Amendments to the “Know Before You Owe” Mortgage Disclosure

On July 6, 2017, the CFPB finalized 560 pages of updates to the “Know Before You Owe” mortgage disclosure. These updates make several modifications to the Federal mortgage disclosure requirements under the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), implemented in Regulation Z, including the following:

  • Tolerances for the total of payments – Newly established express tolerances for the total of payments to parallel the existing provisions regarding the finance charge;
  • Partial exemption affecting housing finance agencies and nonprofits Two new amendments to expand the scope of the partial exemption from the integrated disclosure requirements for certain non-interest bearing subordinate lien transactions that provide housing assistance loans, along with additional flexibility when loans satisfy the partial exemption;
  • Uniform rule regarding application of the integrated disclosure requirements to cooperative units – New mandate for the provision of the integrated disclosures in transactions involving cooperative units, whether or not cooperatives are classified under State law as real property; and
  • Guidance on sharing disclosures with various parties involved in the mortgage origination process Incorporation of, and expansion upon, previous webinar guidance to provide greater clarity.

See 12 CFR 1026 (Regulation Z).

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