The House of Representatives 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.”
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.”
The bill was supported by the Mortgage Bankers Association, the National Association of Realtors and the American Land Title Association. NAILTA also worked with various offices on Capitol Hill to help them understand the complexities of the simultaneous issue rate discount in the states affected and urged support of the bill.
NAILTA President, Rob Holman stated, “Our members expressed a considerable amount of frustration trying to explain to consumers why the true value of the discount was not being shown on settlement documents. It was not easy for consumers to understand and needed to be addressed.”
Holman continued, “This was one of those situations where there was good public policy to change the CFPB’s focus to actually improve consumer understanding of the settlement pricing process. We were happy that Congress wanted to tackle this issue and we remain hopeful that it will survive further opposition.”
The bill is now pending in the U.S. Senate, where further passage is uncertain.