The CFPB (aka “the mortgage police”) indicates that implementation of the “Know Before you Owe” disclosure rule is probably postponed until October 2015. Of course nothing is official quite yet. The Know Before Yow Owe rule requires mortgage lenders use updated and more consumer friendly disclosures.
Two new disclosures – the “Closing Disclosure” and the “Loan Estimate” are the heart of the “Know Before you Owe” legislation. These new laws are all a part of new sweeping mortgage regulation known as “TRID.” If the CFPB postpones TRID, an amendment will be released delaying the effective date of “Know Before you Owe” until October 1, 2015 (unless they choose to delay the delay).
Reasons for a Possible TRID Delay
The CFPB sited 2 “official” reasons for the rumored implementation delay:
- An administrative error in the law
- People too busy transitioning into the new school year
In reality, unprepared title companies and lenders are behind the delay. Primarily, the industry on the whole is not ready from a software and systems perspective. Whether or not the CFPB “wants” to delay TRID, they probably will based on the “greater good.”
The CFPB bullying an unprepared industry into the new law creates significant collateral damage for consumers. Considering the whole intent behind TRID is consumer protection, it appears the delay is likely.
By Jeremy House