Industry Organizations Request Delay of TILA-RESPA Integration

by devteam November 12th, 2010 | Share

The Mortgage Bankers Association,rnAmerican Bankers Association, and six other trade groups representing thernfinancial services sector sent a letter Wednesday to Obama Administrationrnpolicy makers calling for a delay in considering improved disclosures for mortgagernborrowers under the Truth in Lending Act (TILA) and Real Estate SettlementrnProcedures Act (RESPA). </p

The letter, addressed to Treasury Secretary Tim Geithner,rnHousing and Urban Development Secretary Shaun Donovan, and Federal ReservernChairman Ben Bernanke expresses concern that the government’s intention to combinerntwo disclosures into a single integrated document may be one change too many forrnfinancial institutions to manage in the current environment.  </p

The writers applaud thernactions of the Federal Reserve and HUD to improve disclosures to borrowers andrnstates that integrating them into a single document will greatly increaserntransparency and consumer understanding of the mortgage transaction, but statesrnthat the government must realize that the initiative, which is currently beingrnmanaged by Special Advisor to the President, Elizabeth Warren and Treasuryrnstaff, is coming “in the midst of a surfeit of proposed and final regulationsrnthat require fundamental changes to the mortgage finance business model and arngeneration of systems which support it.” rn</p

Attached to the letter is arnlist of 28 rules affecting TILA, RESPA, loan officer compensation, the SAFE Actrnand other regulations that are in various stages ranging from proposal torncomment to upcoming compliance deadlines. rnThe associations state that these “have stretched thin therncompliance capabilities of financial institutions.  If these efforts are not coordinated, they staternthat the cumulative burden will “threaten the availability of housing financernoptions, and it will also be difficult for stakeholders to provide input tornthese changes.</p


The letter stresses thatrnthe groups, which also include the American Financial Services Association,rnCommunity Mortgage Banking Project, Consumer Bankers Association, ConsumerrnMortgage Coalition, Housing Policy Council, and Independent Community Bankersrnof America, view integration of RESPA and TILA Disclosures as a first priorityrnand that if they were made truly simpler and combined, or at least madernharmonious and complementary, and if they were presented along with otherrnessential information in a coordinated manner at rational times in the process,rnconsumers would be better equipped to navigate the market, understand theirrnmortgage and settlement costs, and shop intelligently to meet their financingrnneeds.  </p

However, the grouprncomplained that HUDs Good Faith Estimate and HUD-1 Settlement Statement becamerneffective on January 1; the Federal Reserve made changes to its TILA disclosuresrnwhich have not yet become effective, and has now issued 1,000 pages to furtherrnamend them.  Each of these have required “extensivernreview and an enormous investment of time by stakeholders to comment, divertingrnenergy that would be better spent on RESPA-TILA integration”  The letter further states, thatrn”Considering that comments are due December 23, and that to commentrneffectively the proposed changes must be considered in the light of thernRESPA-TILA proposals to come, a public announcement of a postponement isrnwarranted” and the disclosure provisions could and should await the RESPA-TILArnintegration process.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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