Debate around CFPB’s proposed mortgage disclosure rule changes rumbles on

Tolerance calculations remain one of the more technically challenging aspects of TRID compliance, affecting disclosure accuracy, revised estimates, cure payments, quality control reviews and post-closing compliance. Certain charges, including those paid to creditors or mortgage brokers and transfer taxes, are subject to zero tolerance, while recording fees and certain unaffiliated third-party charges fall under a 10% aggregate tolerance when the consumer selects a provider identified by the creditor.

Mortgage attorney Peter Idziak, principal at Polunsky Beitel Green, said the questions posed in the RFI carry direct implications for broker workflow. For brokers, the questions being asked suggest meaningful changes to closing timelines, disclosure tolerances, and potentially the theory of consumer protection that underpins the entire TRID framework. “This is sort of the first item that’s being addressed because there are other sections of that order that deal with, for example, ability to repay and the qualified mortgage rule and appraisal modernization which, you know, perhaps arguably might have a greater impact on affordability,” Idziak told Mortgage Professional America. “The TRID revisions could be helpful, but probably more at the margins.”

Industry and consumer groups split on direction

The Independent Community Bankers of America called on the CFPB to tailor requirements “where appropriate” for small and mid-sized banks, with Tim Roy, the group’s vice president of housing finance, saying this would let community banks meet local financing needs while maintaining strong consumer protections. Roy said the ICBA appreciated that the CFPB specifically sought input on whether certain construction-loan disclosure requirements should be modified or waived.

Consumer advocates warned against loosening the framework. Andrew Pizor, senior attorney at the National Consumer Law Center, said mortgage transactions are too complex to digest at the closing table at the last minute. “The pre-consummation disclosures and the right of rescission complement each other,” Pizor said. “Consumers deserve to see the final loan terms before closing, and they need a chance to cancel if they have been pressured into signing.”

Former CFPB senior counsel Richard Horn, who led the original TRID rulemaking and now serves as managing partner at Garris Horn, said the RFI indicates a willingness to amend TRID’s timing and tolerance requirements. Horn said he expects both critics and consumer groups favoring current tolerances to respond, and that the CFPB “should weigh all sides.”