House Votes 4-Month ‘Hold Harmless’ Period on New Mortgage Lending Rules

Filed in Capitol Hill, Homeownership, Housing Finance by on October 7, 2015 0 Comments

HousingFinanceIn a victory for NAHB, the House today approved bipartisan legislation that would provide a hold-harmless period until Feb. 1, 2016 for those making a good-faith effort to comply with new mortgage lending rules instituted by the Consumer Financial Protection Bureau (CFPB) on Oct. 3.

Because of the importance of this issue to the housing industry, NAHB designated support for H.R 3192, the Homebuyers Assistance Act, as a key vote.

Over the past few months, NAHBNow has periodically alerted our readers to the impending changes so that they will be prepared and can avoid any unwanted closing delays.

Under the new rules, the Good Faith Estimate, the Truth in Lending and HUD-1 Settlement Statements have been replaced by the CFPB’s new integrated disclosure forms, the “Loan Estimate” and the “Closing Disclosure.”

The biggest change is that the Closing Disclosure must be provided to the consumer a full three days prior to closing, and if there are certain changes during that 72-hour period, the closing could be delayed.

While CFPB recognizes the “significant systems and operational changes” that are required by institutions to comply with the rule, the agency has fallen short of offering a hold-harmless period for the initial months of the new process that NAHB and industry allies requested.

Though the House vote is an important step in the right direction, the Obama administration has threatened to veto the legislation if it reaches the president’s desk.

Prior to the House vote, NAHB sent lawmakers a letter stating that a “formal hold-harmless period will ensure that the real estate settlement and mortgage lending industries can adapt their business processes and continue to meet the home buyer’s needs during the early stages of implementation. H.R. 3192 will help prevent unnecessary and costly delays in the real estate settlement process during a critical time in this economic recovery period.”

Listen to the replay of NAHB’s June 24 webinar to prepare those in the residential construction field for the changes, explaining how to work proactively with lenders and settlement stakeholders to avoid unnecessary delays to home closings.

Visit NAHB’s website to learn more about the new rules and download resources to help you comply. For more information, contact Steve Linville at 800-368-5242 x8597.

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