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
Slate Property Group's Martin Nussbaum and a rendering of the project
Hakimian, Certes land $59M loan for East Harlem multifamily project
Hakimian, Certes land $59M loan for East Harlem multifamily project
From left: 909 Third Avenue, 79 Fifth Avenue, 240 West 37th Street and 27 East 62nd Street (VNO, Cercone Exterior Restoration, Google Maps)
These were the largest Manhattan real estate loans in April
These were the largest Manhattan real estate loans in April
C-PACE gives landlords and developers cheap financing in exchange for making energy efficient improvements. (Getty)
Landlords can now retroactively tap financing tool for energy improvements
Landlords can now retroactively tap financing tool for energy improvements
11 East 26th Street with Henry and Justin Elghanayan (Google Maps, Getty)
Rockrose investment values Nomad office building at $235M
Rockrose investment values Nomad office building at $235M
Jamie Dimon, Steve Roth, Donald Trump and 555 California St. (Trump, Getty)
Vornado lines up $1.2B refi of SF tower co-owned with Trump
Vornado lines up $1.2B refi of SF tower co-owned with Trump
Ron Perelman and 35-39 East 62nd Street (Getty, Google Maps)
Big discounts on sale of Perelman properties and loans
Big discounts on sale of Perelman properties and loans
arrow_forward_ios

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

Loading...