‘Know Before You Owe’ rules updated

July 7, 2017 --Updates to the “Know Before You Owe” mortgage disclosure rule from CFPB, with amendments intended to formalize guidance in the rule, were released by the bureau Friday. In a statement, CFPB said the updates are aimed providing “greater clarity and certainty.” The changes will facilitate implementation of the Know Before You Owe rule by the mortgage industry; CFPB stated it is also releasing a limited follow-up proposal to address an additional implementation issue.

Among the issues that the amendments address are:

  • Tolerances for the total of payments: The updates include tolerance provisions for the total of payments that parallel the tolerances for the finance charge and disclosures affected by the finance charge.
  • Housing assistance lending: The update promotes housing assistance lending by clarifying that recording fees and transfer taxes may be charged in connection with those transactions without losing eligibility for the partial exemption. It also excludes recording fees and transfer taxes from the exemption’s limits on costs.
  • Cooperatives: The updates extend the rule’s coverage to include all cooperative units. Currently, the rule only covers transactions secured by real property, as defined under state law.
  • Privacy and sharing of information: CFPB stated it is finalizing additional commentary to clarify how a creditor may provide separate disclosure forms to the consumer and the seller.

‘Know Before You Owe’ finalized amendments

‘Know Before You Owe’ proposal