The Consumer Financial Protection Bureau (“CFPB”) has released proposed rules introducing new RESPA/TILA combined disclosures and revising existing requirements regarding high-cost mortgage loans.
The “Loan Estimate” and “Closing Disclosure,” which consumers will receive after applying for a loan and before closing, are part of the CFPB’s Know Before You Owe mortgage project. The proposed rule sets forth the new forms, places restrictions on closing cost increases, and proposes amendments to the calculation of the finance charge.
The newly released rules regarding high-cost mortgage loans expand the definition of “high-cost mortgage” and offer additional protections to borrowers who choose to take out these loans. Among other things, the rules would also generally ban balloon payments and prepayment penalties for high-cost mortgage loans.
Links to the new rules and forms are available on the CFPB website at:
http://www.consumerfinance.gov/knowbeforeyouowe/
http://files.consumerfinance.gov/f/201207_cfpb_proposed-rule_high-cost-mortgage-protections.pdf