The Consumer Financial Protection Bureau (CFPB) released a statement on April 29, 2020 providing guidance and additional clarification to certain disclosure requirements for consumers who have a financial emergency due to the Coronavirus pandemic and need to obtain funds through the quick closing of a loan.

The interpretive rule provide clarification that consumers can exercise their rights to modify or waive waiting periods required by the Truth in Lending Act and the Real Estate Settlement Procedures Act, known as TRID.

Under the new guidance, the CFPB will allow a consumer with a financial emergency to waive waiting periods if three conditions are met:

  1. The extension of credit is needed to meet a financial emergency
  2. The consumer provides a brief statement saying the financial need is due to COVID-19
  3. The emergency necessitates closing a mortgage credit transaction before the end of TRID’s waiting period.

Lenders are encouraged to voluntarily inform consumers aware of their ability to use the modification and waiver provisions during the pandemic prior to the end of an applicable waiting period.

Furthermore, the bureau also indicated a “changed circumstance” can allow creditors to use revised estimates to reflect these changes in settlement charges for the purpose of determining good faith provisions.

A FAQ was published to address questions surrounding the mortgage origination rules related to the COVID-19 emergency. If you have additional questions about how this impact’s your institution’s mortgage lending operations, contact a Doeren Mayhew regulatory compliance specialist.

Author

By Heather Feltner, Lending and Compliance Specialist