Suggesting the delay may be beneficial to both lenders and consumers, the Consumer Financial Protection Bureau (CFPB) has delayed for a second time the launch of the integrated disclosures for residential mortgage loans under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). It is also called the Know Before You Owe rule.

According to suprajd, members of Congress from both sides of the aisle suggested the CFPB postpone the deadline to give lenders additional time to put in motion the necessary changes for the new disclosure form and to test compliance systems.

While the postponement may harm consumers who will not be able to take advantage of the new rules as soon, the CFPB states in the long run the transition will smooth the path for borrowers by giving lenders a longer time to adjust.

The TILA-RESPA Disclosure rule resulted from the Dodd-Frank Act to give borrowers transparency regarding main features of their mortgages. Although the new launch date is Oct. 3 of this year, the CFPB may offer a grace period to lenders which will allow time for CFPB examiners to implement a compliance review of the new rule into their audit procedures. MHProNews understands TILA and RESPA both offer the opportunity for consumers to sue lenders for failing to comply with the new disclosure rule. ##

(Image credit: housingwire)

Article submitted by Matthew J. Silver to Daily Business News-MHProNews.