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25 » VISIT US ONLINE @ DSNEWS.COM CFPB INTRODUCES NEW FORMS FOR INTEGRATED DISCLOSURE RULE Charged by the Dodd-Frank Wall Street Reform and Consumer Protection Act to integrate loan disclosures stemming from the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA), the Consumer Financial Protection Bureau (CFPB) has created a united mortgage disclosure rule. e new rule integrates four forms into two in order to create more streamlined and easier to understand mortgage disclosure paperwork. e CFPB notes that consumers found the previous system confusing, with overlapping and inconsistent language. e government agency's new rule and forms will attempt to clear up the confusion. In a guide accompanying the new forms, the CFPB said, "e forms use clear language and design to make it easier for consumers to locate key information, such as interest rate, monthly payments, and costs to close the loan. e forms also provide more information to help consumers decide whether they can afford the loan and to facilitate comparison of the cost of different loan offers, including the cost of the loans over time." Two forms have been combined—the Good Faith Estimate (GFE) and the initial Truth-in- Lending Disclosure—to create a new form, the Loan Estimate. e Loan Estimate is designed to bring transparency to the lending process, providing key features, costs, and risks in an easier to understand format. e Loan Estimate must be provided to consumers no later than the third business day after submitting a loan application. Two other forms have been combined as well—the HUD-1 and the final Truth-in-Lending disclosure—to create another new form, the Closing Disclosure. e purpose of the newly created form is to help consumers understand all of the costs in the transaction. e Closing Disclosure must be provided to consumers at least three business days before consummation of the loan. e CFPB noted some caveats with the new rule: "e final rule applies to most closed-end consumer mortgages. It does not apply to home equity lines of credit (HE- LOCs), reverse mortgages, or mortgages se- cured by a mobile home or by a dwelling that is not attached to real property (i.e., land). e final rule also does not apply to loans made by persons who are not considered 'creditors,' because they make five or fewer mortgages in a year." e TILA-RESPA rule is effective August 1, 2015, after which the new forms will take ef- fect.performance goals." e FHFAOIG called for more monitoring and oversight in order to ensure provisions of SAI are followed. CONSUMER COMPLAINTS TO CFPB NEARLY DOUBLE IN 2013 Consumer complaints to the Consumer Financial Protection Bureau (CFPB) nearly doubled over the course of 2013, the agency revealed in an annual report. According to CFPB's figures, complaint volume last year totaled 163,700, an 80 percent increase from the 91,000 recorded complaints in 2012. Including this year, the bureau has received more than 310,000 complaints to date. e leap in volume underscores the chal- lenges that still remain despite the progress made by financial industries in the last few years. "Consumer complaints have become central to the work of this agency. ey enable us to listen to, and amplify, the concerns of any American who wants to be heard," said CFPB director Richard Cordray. "ey are also our compass. ey make a difference by informing our work and helping us identify and prioritize problems for potential action." Areas of dissatisfaction ranged from bank accounts to debt collection to all manner of loans—including mortgages, which represented the greatest share of complaint volume at 37 percent. At 59 percent, the greatest share of mort- gage-related issues came up when borrowers were unable to pay, "such as issues relating to loan modifications, collections, or foreclosures," CFPB said in its report. At a distant second in volume was "making payments" (26 percent), followed by complaints about applying for a loan (8 percent). "For consumers applying for a mortgage loan, consumers raise issues related to interest rate-lock agreements, such as lenders refusing to honor rate-locks or assessing penalties when the loan does not close," the agency explained. Upon receiving a complaint, CFPB expects companies to respond within 15 days and to provide a description of the steps taken or planned. According to the bureau, companies have responded to more than 93 percent of com- plaints sent to it, and consumers have disputed 21 percent of those responses. About 7 percent of complaints end up with some form of monetary relief, according to CFPB, with the median amount coming to $460 for mortgage-related complaints. CFPB REMAINS INTEGRAL IN HANDLING MORTGAGE COMPLAINTS While the Consumer Financial Protection Bureau ostensibly handles all complaints about a consumer's financial well-being, mortgages seem to be a hot topic among consumers. The chart below tracks total mortgage complaints from 2011 to 2014, broken down by the particular problem that consumers are having–and more importantly, reporting. Loan servicing, payments, escrow account Loan modification, collection,foreclosure Application, originator, mortgage broker Settlement process and costs Credit decision / Underwriting Other 29,444 59,881 7,272 3,627 2,309 2515 Source: CFPB's Socrata Dataset

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