Bipartisan Bill Would Force-Fix One of TRID’s Tricky Problems


A bipartisan bill introduced in the House of Representatives aims to change a problematic part of the Consumer Financial Protection Bureau’s (CFPB) TILA-RESPA Integrated Disclosures (TRID) rule related to how fees for title insurance are calculated in the Loan Estimate and Closing Disclosure.

The TRID Improvement Act of 2017, introduced by Rep. French Hill, R-Arkansas, and endorsed by Rep. Ruben Kihuen, D-Nevada, has reportedly garnered support from both Republicans and Democrats.

The congressmen are pushing for the change because the CFPB, they say, is unwilling or unable to come up with a solution to a problem with how title insurance fees are calculated in the disclosure forms when a discount is involved.

The problem, according to Hill, is that homebuyers in some states are not receiving an accurate disclosure of their title insurance premiums because, in those states, the CFPB “does not allow the calculation of a discounted rate known as ‘simultaneous issue,’ which is a rate title insurance companies provide to consumers when they purchase a lenders and owners title insurance policy simultaneously.”

Because the TRID forms don’t allow for this discounted rate to be presented accurately, it creates a problem both for consumers and mortgage lenders.

In a statement the American Land Title Association (ALTA), a national trade association representing the land title insurance industry, applauded the bill, saying it would “help consumers understand the true cost of their real estate transaction.”

“The TRID Improvement Act of 2017 amends the Real Estate Settlement Procedures Act (RESPA) to require the Consumer Financial Protection Bureau (CFPB) to allow the accurate disclosure of title insurance premiums and discounts to homebuyers,” the organization says in its statement. “Under the current regulation, the CFPB does not allow title insurance companies to disclose available discounts for lenders title insurance on the government mandated disclosures.”

“We’re thankful Representatives Hill and Kihuen recognize the simple truth that consumers deserve to know how much they will pay when buying and selling a house,” says Daniel D. Mennenoh, president of ALTA. “For more than three years, we’ve urged the CFPB to make this straightforward change. Our research shows that 40 percent of consumers feel confused by the CFPB’s requirement to provide inaccurate pricing on title insurance. We’re eager to work with Congress and the bureau to eliminate this confusion.”

“Consumers deserve to know the costs of their title insurance premiums when they purchase a home. As TRID has become a massive, complex rule, it is hindering financial institutions’ ability to share accurate information to consumers during the mortgage closing process,” Hill says in a statement. “This legislation seeks to correct this error by ensuring that consumers know the exact cost of their title insurance – not the number reported as one price on a lending estimate and another price on a closing document. I am proud to work with my colleague, Representative Ruben Kihuen to take the first step in undoing this compliance nightmare.”

A draft version of the bill would have amended the Real Estate Settlement Procedures Act and the Truth in Lending Act to expand the time period granted to a creditor to cure a good-faith violation on a loan estimate or closing disclosure from 60 to 210 days. However, the current version of the bill makes no mention of extending the time period to cure a good-faith violation.

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