The Consumer Financial Protection Bureau (CFPB) finalized an update to its mortgage disclosure rules, including an amendment clarifying that it’s appropriate for real estate brokers or agents to receive copies of their clients’ Closing Disclosure.
The Know Before You Owe mortgage disclosure rules issued in 2015 caused lenders and title companies to become concerned about sharing closing documents with any parties other than the principals to the transaction. This change made it more difficult for brokers or agents to access information needed to guide their clients through the closing process.
The Bureau has received many questions about sharing the disclosures provided to consumers with third parties to the transaction, including the seller and real estate brokers. The Bureau understands that it is usual, accepted, and appropriate for creditors and settlement agents to provide a Closing Disclosure to consumers, sellers, and their real estate brokers or other agents. The Bureau is finalizing additional commentary to clarify how a creditor may provide separate disclosure forms to the consumer and the seller.
The final rule is effective 60 days after it is published in the Federal Register, but the mandatory compliance date is Oct. 1, 2018. In the meantime, TREC’s Third Party Financing Addendum (TAR 1901, TREC 40-7) and the Authorization to Furnish TILA-RESPA Integrated Disclosures form (TAR 2516) created by TAR provide written permission for lenders and title companies to deliver copies of closing disclosure documents to the principal’s REALTOR®.