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Timeline > Consumer Financial Protection Bureau

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Timeline

Here’s a full timeline of how we created the Loan Estimate and Closing Disclosure forms, part of our Know Before You Owe: Mortgages project. It’s a look back at our effort to make mortgage disclosures simpler and more effective, with the input of the people who will actually use them.

You can also return to the main page to view an interactive timeline.


July 21, 2010

The Dodd-Frank Wall Street Reform and Consumer Protection Act is signed into law.

The new law required the CFPB to combine the Truth in Lending and Real Estate Settlement Procedures Act disclosures.


December 6, 2010

The Treasury Department hosts a mortgage disclosure symposium.

The event brought together consumer advocates, industry, marketers, and more to discuss CFPB implementation of the combined disclosures.


February 21, 2011

Design begins.

Starting with the legal requirements and the consumer in mind, we began sketching prototype forms for testing.

During this process, the team discussed preliminary issues and ideas about mortgage disclosures. This session set the context for the disclosures and was a starting point for their development. The team continued to develop these issues and ideas over more than a year during the development process.


May 18, 2011

Know Before You Owe opens online.

We posted the first two prototype loan estimates. We asked consumers and industry to examine them and tell us what worked and what didn’t. We repeated this process for several future rounds. Over the course of the next ten months, people submitted more than 27,000 comments.


May 19, 2011 – May 24, 2011

Qualitative testing begins in Baltimore.

We sat down with consumers, lenders, and brokers to examine the first set of loan estimate prototypes to test two different graphic design approaches.

Disclosures tested:

Prototype A
Prototype B


June 27, 2011 – July 1, 2011

Los Angeles, CA

Consumers and industry participants worked with prototypes with lump sum closing costs and prototypes with itemized closing costs.

Disclosures tested:

Prototype A
Prototype B


August 1, 2011 – August 3, 2011

Chicago, IL

Again, we asked testing participants to work with prototypes with lump sum closing costs and itemized closing costs.

Disclosures tested:

Prototype A
Prototype B


September 12, 2011 – September 14, 2011

Springfield, MA

Another round of closing cost tests, as we presented participants with one disclosure that had the two-column design from previous rounds and another that used new graphic presentations of the costs.

Disclosures tested:

Prototype A
Prototype B


October 17, 2011 – October 19, 2011

Albuquerque, NM

In this round, we presented closing costs in the itemized format and worked on a table that shows how payments change over time.

Disclosures tested:

Prototype A
Prototype B


November 8, 2011 – November 10, 2011

Des Moines, IA

We began testing closing disclosures. Both designs included HUD-1-style numbering for closing details, but two different ways of presenting other costs and Truth in Lending information.

Disclosures tested:

Prototype A
Prototype B


December 13, 2011 – December 15, 2011

Birmingham, AL

One form continued to use the HUD-1 style numbered closing cost details; the other was formatted more like the Loan Estimate, carrying over the Cash to Close table and no line numbers.

Disclosures tested:

Prototype A
Prototype B


January 24, 2012 – January 26, 2012

Philadelphia, PA

In this round, we settled on prototypes formatted like the Loan Estimate, but one included line numbers and the other didn’t. We also began testing the Loan Estimate with the Closing Disclosure.

Disclosures tested:

Prototype A
Prototype B
Prototype C


February 20, 2012 – February 23, 2012

Austin, TX

Participants reviewed one Loan Estimate and one Closing Disclosure (with line numbers) to see how well they worked together.

Disclosures tested:

Prototype A
Prototype B


February 21, 2012

We convene a small business review panel.

A panel of representatives from the CFPB, the Small Business Administration (SBA), and the Office of Management and Budget (OMB) considered the potential impact of the proposals under consideration on small businesses that will provide the mortgage disclosures.


March 6, 2012

We meet with small businesses.

The panel met with small businesses and asked for their feedback on the impacts of various proposals the CFPB is considering. This feedback is summarized in the panel’s report.
(Note: Link to large PDF file.)


March 26, 2012

Back to Baltimore!

We conducted one final round of testing to confirm that some modifications from the last round work for consumers.

Disclosures tested:

Prototype A
Prototype B
Prototype C


July 9, 2012

Proposal of the new rule.

The CFPB released a Notice of Proposed Rulemaking. The notice proposed a new rule to implement the combined mortgage disclosures and requested your comments on the proposal.


November 6, 2012

Comment period on most of the proposed rule closes.

Between the public comment period and other information for the record, the CFPB reviewed nearly 3,000 comments. These comments helped us improve the disclosures and the final rule.


October 11, 2012 – December 13, 2012

We test Spanish language versions of the disclosures across the country.

We conducted qualitative consumer testing on Spanish language versions of the proposed disclosures. We tested in three cities: Arlington, Va. (October 11-12); Phoenix, Az. (November 14-15); and Miami, Fla. (December 12-13).


April 23, 2013 – June 13, 2013

Validating our testing

With the help of Kleimann Communication Group, the contractor who helped us throughout the testing process, we conducted a quantitative study of the new forms with 858 consumers in 20 locations across the country. By nearly every measure, the study showed that the new forms offer a statistically significant improvement over the existing forms.


June 18, 2013 – July 26, 2013

Additional testing with modified disclosures

In response to comments, we developed and tested different versions of the disclosures for refinance loans, which we tested for three rounds. (In our last round, we tested a modification for both purchases and refinances.) We also did one more round of Spanish language testing for the refinance versions. The modified disclosures tested well and are the ones included in the final rule.


November 20, 2013

A final rule

The CFPB issues a Final Rule. The final rule creates new integrated mortgage disclosures and details the requirements for using them. The rule is effective for mortgage applications received starting August 1, 2015.


June 24, 2015

New Effective Date Proposed

The CFPB proposes a new effective date of October 3, 2015 for the Know Before You Owe mortgage disclosure rule.


July 21, 2015

New Effective Date Announced

The CFPB issues a final rule moving the effective date to October 3, 2015.


Can I Get a HUD?

After October 3, 2015 you will no longer be receiving a HUD-1 settlement statement before consummation of a closed-end credit transaction secured by real property.

Say what?!?!

That’s right, I just said consummation of a closed-end credit transaction and no more HUD. There is new jargon to go along with the new, easy-to-read, consumer friendly, disclosures.

Bon Voyage HUD!

After October 3, the ‘HUD’  will be called a ‘Closing Disclosure’ (CD). ‘Closing’ will be referred to as consummation and the ‘Good-Faith-Estimate’ (GFE) will be called a ‘Loan Estimate’.

Take a peek at the new disclosures!

www.closing-disclosure.com

Closing-Disclosure_Page_1 Closing-Disclosure_Page_2 Closing-Disclosure_Page_3 Closing-Disclosure_Page_4 Closing-Disclosure_Page_5


Stay Afloat Post-TRID

2015 Florida Realtors® Convention & Trade Expo


 

Each year, the Florida Realtors® Convention & Trade Expo gathers thousands of Realtors looking to up their game. This years theme is Celebration 15; the event falls on August 19-23 and is held at the Rosen Shingle Creek in Orlando, Florida. The free two-day Expo is on Thursday and Friday–all you have to do is register. There are over 30 education sessions sorted into six learning tracks–technology, broker, productivity, trends, personal growth, and continuing education. Along with the Convention, the Trade Expo has over 200 exhibitors that come packed with promotional materials and exquisite raffle prizes. This years keynote speaker is Notre Dame’s former Head Coach Lou Holtz.

On October 3, 2015 the TILA-RESPA Integrated Disclosure (TRID) rule will go into effect. The Florida Agency Network (FAN) is leading the industry through uncharted waters to the new disclosures. Title agencies in the FAN network are prepped and ready to keep you afloat before, during, and after these industry changes. Join us at booth 625 as we say Bon Voyage to the HUD-1 and celebrate the implementation of the new Closing Disclosure (CD). Get social with us and enter to win an Apple iWatch!


Consumer Financial Protection Bureau Finalizes Two-Month Extension of Know Before You Owe Effective Date

Washington, D.C. – The Consumer Financial Protection Bureau (CFPB) today issued a final rule moving the effective date of the Know Before You Owe mortgage disclosure rule, also called the TILA-RESPA Integrated Disclosures rule, to October 3, 2015. The rule requires easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer. The Bureau issued the change to correct an administrative error that would have delayed the effective date of the rule by at least two weeks, until August 15, at the earliest.

The Bureau is finalizing Saturday, October 3 as the effective date. The Bureau believes that moving the effective date may benefit both industry and consumers with a smoother transition to the new rule. The Bureau further believes that scheduling the effective date on a Saturday may facilitate implementation by giving industry time over the weekend to launch new systems configurations and to test systems.  A Saturday launch is also consistent with industry plans tied to the original effective date of Saturday, August 1.

The final rule issued today also includes technical corrections to two provisions of the Know Before You Owe mortgage disclosure rule.

A copy of the final rule is available here: http://files.consumerfinance.gov/f/201507_cfpb_2013-integrated-mortgage-disclosures-rule-under-the-real-estate-settlement-procedures-act-regulation-x-and-the-truth-in-lending-act-regulation-z-and-amendments-delay-of-effective-date.pdf

Source: www.consumerfinance.gov


Transparent Sleeping Capsules Suspended Above Peru’s Sacred Valley

Hanging from a sheer cliff face in Peru’s sacred Valley of Cuzco, three transparent capsules have been installed, providing accommodation for particularly intrepid guests. To reach the sleeping pods, lodgers must first climb 400 feet (122 meters), or hike an challenging trail using ziplines before enjoying the impressive views of the mystical valley.‬ ‪

skylodge adventure suites natura vive glass pods peru designboom
Three transparent capsules have been installed on the cliff face.

 

Clinging to the rock face, the Natura Vive Skylodge is composed of three capsules measuring 24 feet in length and 8 feet in height and width. Each unit is handcrafted from aerospace aluminum and weather resistant polycarbonate, and comes complete with four beds, a dinning area and a private bathroom — separated from the bedroom by an insulated wall.

skylodge adventure suites natura vive glass pods peru designboom

The suites feature six windows and four ventilation ducts that ensure a comfortable internal atmosphere. An alternative lighting system consists of four interior lamps and a reading light, all powered by solar panels.‬ ‪

skylodge adventure suites natura vive glass pods peru designboom
Source: www.designboom.com


CFPB Will Push TRID Implementation to Oct. 1

CFPB-Article-201401291630

After months of denying requests from real estate, mortgage and settlement service industry professionals and trade groups to either delay implementation of the TILA-RESPA Integrated Disclosures (TRID) regulation or agree to enact a “hold harmless” enforcement period, the Consumer Financial Protection Bureau (CFPB) announced today that it will push the Aug. 1 implementation deadline to Oct. 1.

The industries that will be affected by the regulation will now have two more months to prepare their mortgage processing systems, staffs and partners for the sweeping mortgage transaction changes.

The new implementation date came as a relief to many who have been concerned about their ability to comply with the new rule due to technical and operational challenges — not to mention tackling the onslaught of other mortgage industry regulations thrown at them in the last two years — but many are wondering why the bureau had a sudden change of heart.

Richard Cordray.
CFPB Director Richard Cordray

According to CFPB Director Richard Cordray, the bureau “made this decision to correct an administrative error that we just discovered in meeting the requirements under federal law, which would have delayed the effective date of the rule by two weeks. 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.”

In its announcement, the CFPB did not elaborate on the nature of its “administrative error.” However, a spokesman from the CFPB told Inman that the bureau failed to timely notify Congress about the Aug. 1 deadline, a responsibility it has under the Congressional Review Act, which requires agencies to submit the rule to Congress and the Government Accountability Office 60 days before the effective date.

Had the CFPB submitted the rule to Congress and the GAO, its submission should have included a copy of the rule; a concise general statement relating to the rule, including whether it is a major rule; and the proposed effective date of the rule.

Many in the industry are curious about why, after months of trade group letters and comments, testimony in congressional hearings to push for a lenient enforcement period through the end of the year and even federal legislation calling for the CFPB to hold the industry harmless as it adjusts to the sweeping changes, the bureau refused to delay implementation — only to abruptly reverse course less than two months before the Aug. 1 deadline for something as seemingly innocent as an “administrative error” and children starting a new school year.

And some are wondering if that’s the real reason behind the delay.

On March 26, Inman reported that one industry professional, speaking on condition of anonymity, predicted that the CFPB would “announce a delay right after June 18,” which happened to be the date that mortgage industry software provider Ellie Mae planned the release of an update to its mortgage management system, Encompass.

The update included TRID support, but for software that supports about 80 percent of the loan origination systems at small and midsized banks to be released less than 60 days before TRID implementation — during the busy summer months, no less — there are bound to be glitches, our source said.

Other sources tell Inman that other software used by some of the top mortgage lenders and settlement agents in the country “blew up” this week.

Regardless of the reasons behind the CFPB’s announcement, many in the industry are breathing a collective sigh of relief and retooling their preparation efforts for the fall.

“You’ve got to give them credit for pushing the effective date to October,” said Michelle Korsmo, CEO of the American Land Title Association (ALTA), which from the CFPB’s release of the final rule in November 2013 has been the industry trade group that has taken the lead in the educational, training and preparation efforts. “The bureau could have changed the effective dates for a shorter period of time.

“Clearly, the bureau listened to the concerns that industry has for consumers. Consumers would be helped even more if the CFPB also announced a specific hold-harmless period for industry to understand how the forms will work in real-life transactions. Under TRID, some mortgage lenders and settlement service providers may initiate additional risk management tactics that could slow the closing process for homebuyers.”

National Association of Realtors President Chris Polychron said in a statement that “Realtors appreciate that the CFPB has demonstrated an understanding of the need for additional time to accommodate the interests of the many consumers and providers. We will continue to work with CFPB to minimize any possible market disruptions or uncertainty that could develop following the implementation.”

And Mortgage Bankers Association President and CEO David H. Stevens lauded the CFPB for continuing “to prove itself capable of working in a transparent, constructive manner throughout this process.”

“The complexity of this rule, which impacts not just mortgage disclosures but also the business processes behind the entire real estate transaction, warrants the additional time to get it right and ensure that consumers are not adversely affected by the transition,” Stevens said.

“MBA will be providing comments on this proposal to recommend the best way to implement the delay in a manner that protects consumers and mitigates disruptions for lenders in the middle of this complex conversion.”

We likely won’t know the full details of what happened at the CFPB until it issues an official proposed amendment to delay the effective date of the TRID rule. The public will have an opportunity to comment on this proposal, and a final decision is expected shortly thereafter.

But we are already hearing that some companies that have been testing new or updated mortgage processing software in the last two weeks are experiencing significant technical glitches.

Source: www.inman.com


Florida AG Accuses Clearwater Firms of Fraud in Property Deals

Fraud

Attorney General Pam Bondi filed a complaint against two Clearwater businesses and their president, alleging the companies defrauded consumers out of thousands of dollars in a land buying scheme.

According to the complaint, Property Solutions International Corp., Premier 1 Property Inc. and Marvin Scott promised consumers they could sell their property for many times the value of the land.

The defendants, who also conducted business using the names Coast to Coast Land and FSBO Property Solutions, charged upfront fees on average of $2,250 for brokering the deals, sometimes promising to refund most of the money, but rarely following through on those promises, a statement said.

State records list Scott as president of Property Solutions International in Clearwater. He’s also listed as president of Premier 1 at the same Clearwater address, although Premier 1 was administratively dissolved in 2013 after not filing an annual report, the Division of Corporations said.

The complaint seeks restitution for 34 complainants who paid more than $70,000 to Scott and the two businesses.

Source: www.bizjournals.com


I Hate the Open-Plan Kitchen—and Amazingly, I’m No Longer the Only One

Listing Photography

A few years ago, my husband and I moved into a gorgeous Craftsman-style house in the Pacific Northwest. It was chockablock with original details like dark wood paneling, stained-glass transom windows … and a 100-square-foot, totally enclosed kitchen in a faux country style—think yellow oak cabinets paired with linoleum countertops. And though we found most of the historical elements quite charming, the kitchen needed a complete overhaul.

So we hired an architect who hatched a plan to steal some space from the nearby office area. But he didn’t want to stop there. He also wanted to knock down the wall between the kitchen and the formal dining room, to give us the open-concept kitchen that it seems just about everybody else has these days.

We balked. Lose the cool, old-fashioned swinging door? And the opportunity to leave my kitchen a mess during dinner parties?

Heck no. Because after having grown up in a New York City apartment where public and private spaces were blurred—both bathrooms were en suite, so guests had to traipse through our bedrooms to use the loo—I loved the idea of an older house’s separate rooms. (Remember Julia Child’s famous quip: If you drop something, “you can always pick it up if you’re alone in the kitchen. Who is going to see?”) To me, they aren’t isolated and inconvenient, but rather refined and gracious. Though open kitchens may be all the rage, let me dare to say right here: I’m anti-open kitchen.

For much of domesticated human history—until mid-past century—I wasn’t alone in the enclosed-kitchen camp. Walk into an American home built before the 1950s, and you’ll most likely find the kitchen tucked away in a far-off corner of the main floor. Rarely visited by guests and not a place where the family spent much time, the kitchen was separate and functional, not designed for hanging out.

“The equipment was usually along the periphery,” explains Virginia McAlester, author of “A Field Guide to American Houses,” “meaning that anyone who entered the kitchen was most likely greeted by the cook’s back.” Or they wouldn’t see the cook at all—how often does Lord Crawley visit Mrs. Patmore on “Downton Abbey”?

Only that wasn’t thought of as hugely rude or anything, because most social interaction occurred either in front parlors (for welcoming guests) or in dens (primarily just for family). Not having to touch a hot pan was a sign of status.

These days, the kitchen is the place to entertain, thanks in part to mid-20th-century technology that made appliances fit into the cabinetry, not stand freely and hoard all the free space.

“The kitchen was becoming quieter, cleaner, better organized and easier to work in,” writes Porch.com. “In essence, the kitchen was becoming a source of pride.” These days, you flip on HGTV or pick up a flier for an open house in your neighborhood and chances are they’re heralding an open-concept kitchen. They’re great for wooing guests while cooking, or so goes the current real estate lore.

“Food preparation is central to how we entertain and socialize,” says Erin Gallagher, chief of insights for the Research Institute for Cooking & Kitchen Intelligence. “It’s how we live today.” Nine out of 10 kitchen designers, she says, report that their clients want their living, dining, and cooking spaces to flow together.

There’s a practical reason for their popularity, too. In an age when houses are getting smaller for the first time since 2007 (the median size of a new U.S. home in 2010 was 2,169 square feet, up from 1,525 square feet in 1973 but down from the 2007 peak of 2,277 square feet) and house prices are rising like never before, open kitchens maximize space and minimize cost. In a closed-plan house, there are more doors and walls, more trim and details needed to delineate various rooms. And to build all that requires more tradespeople, like electricians and carpenters. Consequently, open-plan kitchens have become the new normal. There’s more natural daylight in an open kitchen, too.

And here’s another bitter pill for the fan of the closed-off kitchen to swallow: Open-concept kitchens might help boost a home’s resale value.

“The most common conversation I overhear when showing a property to potential buyers is ‘Is this wall load-bearing? Can we knock it down to open things up?’” says Arthur Jeppe, a principal Realtor® with Read & Jeppe in Newport Beach, CA. “So no matter how gorgeous a home is, it will most likely sell for less if the kitchen is separate.”

OK, so those are compelling reasons, but I remain unconvinced. In part it’s because I find it beyond challenging to turn out culinary masterpieces (or even just a nice meal) while guests are chatting around me in the kitchen, and also because I just don’t believe it’s a good time to “entertain” anyone while I’m wielding a knife and managing fire. Plus, I’m happier when my whole world—especially my living room furniture—doesn’t smell of bacon grease.

A cozier, rustic kitchen

Astronaut Images/Getty Images

A cozier, rustic kitchen

As it turns out, others might be starting to see things my way. Hilarious and blasphemous blog posts detailing the difficulties of actually living with open floor plans have started to dot the Internet. (“‘Oh my gosh I dropped the chicken!’ In a perfect world, no one would know. Open floor plan?  Well, it’ll be tweeted in minutes.”)

Some architects are seeing an uptick in clients asking for separate kitchens.

“Many of the requests are from older clients, because that’s what they’re used to,” says Timo Lindman, a New York–based residential architect.

But interest is also stemming from sophisticated younger clients rediscovering the value—emotional, if not financial—in drawing a line between public and private space.

“Many properties are designed for a mass market, and in order to appeal to as many people as possible, they include trends like an open-concept kitchen,” says Lindman. “But there’s also a market for interesting, well-thought-out separate spaces. It’s just that they appeal to a group with a more curated aesthetic.”

Tyler Merson, owner of Codfish Park Design in Chatham, NJ, and a former professional chef, is also with me regarding separate kitchens.

“People think they should love open-plan kitchens because they’ve been told to love them,” says Merson, who thinks galley-style kitchens are underrated. “They can be fine for low-impact prep like chopping, but real cooking is messy work and requires a great deal of concentration.” (Man, it feels good to be validated by a professional!)

So could it be a backlash against open-concept kitchens is emerging? Or maybe this is now just one of those things that you have to be either totally for or dead set against. Either way, I’m glad we bucked the trend and kept our separate kitchen. And if you ever come to my house for dinner and experience just how often we set the smoke alarm off, you’ll be glad we did, too.

———

So which kitchen is right for you? Here are a few concepts to consider as you decide:

What kind of cook you are

If you tend to do takeout or don’t mind your mess being visible, then an open-concept kitchen could work for you. But if you’re into preparing elaborate meals and prefer to concentrate while cooking, then consider a space that’s separate from your home’s main living areas.

Think things through

In most states, changing walls requires building permits—and structural modifications can affect your home’s resale value. So before making plans to knock down an existing wall or rough in another, figure out if your long-term plan includes staying put or needing to appeal to other homebuyers in the future.

Be realistic

It’s easy to be dazzled by professional photos of dream kitchens, but what works well in one space might not in another. Consider your own home’s ceiling height, amount of wall space, windows, and views when creating a plan to fit your kitchen and living space.

Work with someone who sees beyond trends

Some architects value separate kitchen spaces while others think they’re outdated. So if you’re considering closing off your cooking space or shopping for a house that features a closed kitchen, consider working with a builder or Realtor who has an eye for creative elements that make separate spaces feel airy (think a bank of windows, skylights, or glass doors).

Source: www.realtor.com


HOA Threatens Lawsuit Over Homeowner's Wheelchair Ramp

HOA

A Brentwood, Tennessee homeowner’s association is threatening to sue a family if they don’t take down a wheelchair ramp in the next week. Per KPHO:

Charlotte Broadnax retrofitted her house with a small ramp after her husband Michael Broadnax suffered a stroke late last summer.

As a result, the homeowners association for the Woodlands of Copperstone is threatening to sue.

“The association demands that within 14 days of the date of this letter, you remove the wheelchair ramp and restore the exterior of your home,” Charlotte Broadnax said, reading from the letter.

” [The Declaration] authorizes the association to come onto your property and remove the ramp and charge you with the work,” Charlotte Broadnax read.
The letter then reads, “If you force the association to sue you, it will seek a court order” and charge the Broadnax’s for attorney’s fees

Unfortunately, this is not the first time a homeowner has experienced issues with an HOA. 

HOA super liens are an issue as of late. The court recently upheld a law that allows homeowners associations to foreclose on homes ahead of first-mortgage providers, giving HOA assessments “super-lien” status that extinguishes first deeds of trust.

There is a constant debate over the true pros and cons of living in a HOA. While some buyers view HOA rules negatively, others say the regulations protect home values and the community for everyone, an article from Bankrate said.

At least for the Broadnax family, the situation appears to be looking up.

Kathleen Sutherland, director of training and technical services at Ghertner and Company,which manages the homeowners association, sent the following statement to Channel 4.  

“The governing documents for this community require that all exterior improvements receive prior approval. A letter was sent to the owner regarding the ramp as no application for approval had been received.

“The board did not know the ramp was for the homeowner, Mr. Broadnax. The association would like to work with the owners on a compromise regarding the appearance and location of the ramp and compliance with any applicable codes.”

Source: www.housingwire.com