The House of Representatives today voted 271 to 145 to approve the TRID (TILA-RESPA Integrated Disclosure) Improvement Act of 2017 (H.R. 3978), which would amend the Real Estate Settlement Procedures Act to require the Consumer Financial Protection Bureau (CFPB) to allow the accurate disclosure of title insurance premiums and any potential available discounts to home buyers as part of the TILA-RESPA integrated disclosures.
The CFPB does not currently permit these disclosures, which creates inconsistencies in mortgage documents and creates confusion for consumers.
According to Congressman French Hill, who introduced the bill last fall, the proposed legislation “modifies requirements related to mortgage disclosures and offers clarification to consumers and regulatory relief to financial institutions.”
“Consumers deserve to know the costs of their title insurance premiums when they purchase a home,” Hill says in a statement. “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. 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.”
Rep. Ruben Kihuen, D-Nev., is also sponsoring the legislation.
According to a statement on Hill’s website, although TRID “was designed to assist consumers with better understanding the home closing process … it has had the opposite effect.”
According to the statement: “In the majority of states, consumers are not receiving an accurate disclosure of their title insurance premiums. In these 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. This rate provides consumers with an effective discount on their owners title insurance policy in order to protect their property rights for as long as they own their home. The CFPB is unwilling to fix this problem on its own, calling on Congress to act.”
It is unclear what chance the bill has of clearing in the Senate.
In a statement, David Stevens, president and CEO of the Mortgage Bankers Association (MBA), praised the House passage of the TRID Improvement Act, and, in particular, the inclusion of the language from two individual bills – H.R. 2948 and the previously free-standing H.R. 3978.
“I want to commend the House of Representatives for passing this package which includes H.R. 2948, which will maintain the important consumer protections established under the federal SAFE Act, while offering enhanced workforce mobility for mortgage loan officers,” Stevens says. “[MBA] is grateful for the leadership of the bill’s author, Rep. Steve Stivers, as well as its bipartisan original cosponsors: Reps. Beatty, Poliquin and Sinema.
“I also want to praise Reps. French Hill and Ruben Kihuen for Title I of the bill (the prior H.R. 3978) which will require the Consumer Financial Protection Bureau to allow the accurate disclosure of title insurance premiums and any potential available discounts to home buyers,” Stvens adds. “MBA now urges the Senate to take up these provisions as part of its bipartisan regulatory relief efforts. We look forward to continuing to work with policymakers on this and other issues impacting real estate finance.”