Government aims to reform mortgage disclosure rule’s “black hole”

New change addresses when companies need to tell consumers about closing cost increases

New York /
May.May 02, 2018 11:00 AM

Park Slope townhouses (Credit: Corcoran)

The Consumer Finance Protection Bureau has finalized changes to a mortgage disclosure rule in an attempt to limit ambiguity about when lenders need to tell prospective borrowers about closing costs.

The changes to the “Know Before You Owe” rule from 2015 aim to clarify when lenders can pass higher closing costs onto consumers and make those costs more transparent on the disclosure form for closings, according to Inman.

The rule was first established to give consumers estimates of terms and closing costs for loans, but confusion arose over when creditors were allowed to pass increased costs onto consumers, as the original rule did not specify a timeframe.

The change establishes a four-day timeframe, getting rid of what the industry had dubbed the “black hole.” These changes were first proposed in July, and the National Association of Realtors had backed them. [Inman]Eddie Small


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Acore Partner Warren de Haan. (Acore, Getty)
Acore Capital raises $1B to provide rescue cash to hotels
Acore Capital raises $1B to provide rescue cash to hotels
 61 Bond Street in Brooklyn, iStar's Jay Sugarman and GFI's Allen Gross (Photos via Google Maps, iStar and Urban Land Institute)
GFI sells ground under Ace Hotel in Brooklyn for $45M
GFI sells ground under Ace Hotel in Brooklyn for $45M
AKA United Nations at 234 East 46th Street (Google Maps, iStock)
Bank forecloses on Prodigy’s AKA United Nations hotel building
Bank forecloses on Prodigy’s AKA United Nations hotel building
From left: 410 Tenth Avenue, 100 Park Avenue, a rendering of 230 East 20th Street, a rendering of 30 Morningside Drive, SL Green's Marc Holliday (Photos via Google Maps, Getty, Gramercy Square, 30 Morningside Drive/Illustration by Kevin Rebong for TRD) 
These were the largest Manhattan real estate loans in January
These were the largest Manhattan real estate loans in January
Ron Perelman with 27-33, 35 and 41 East 62nd Street (Getty; Google Maps)
Citi looks to sell $193M in defaulted loans on Ron Perelman’s buildings
Citi looks to sell $193M in defaulted loans on Ron Perelman’s buildings
Bank of America puts $10B toward affordable homeownership
Bank of America puts $10B toward affordable homeownership
Bank of America puts $10B toward affordable homeownership
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...