Watch Testimony Before Congress on RESPA Changes

ALTA President Will Outline How the CFPB Can Avoid Unintended Consequences for Consumers and Industry

Today at 12:30 p.m. CST, American Land Title Association (ALTA) President Chris Abbinante will participate with other real estate industry leaders in a U.S. House Financial Services Subcommittee hearing entitled "Mortgage Disclosures: How Do We Cut Red Tape for Consumers and Small Businesses?"

The hearing will center around the Consumer Financial Protection Bureau's (CFPB) effort to integrate the current TIL, GFE and HUD-1 Settlement statement into a set of combined forms as part of the implementation of the Dodd-Frank Act. The deadline for publishing a proposed rule according to Dodd-Frank is July 21, 2012.

This is an issue that will affect every title company and we urge you get informed and engaged. Read the pre-filed hearing testimony here by clicking each participant's name, or watch the hearing live by clicking here, and then selecting "Live Webcasts" under "Connect" in the left sidebar.

TLTA has been actively engaged in providing comments to the CFPB over the last 6-9 months as they have rolled out their ideas on possible sample forms. In a meeting earlier this month with the CFPB and other industry members in Washington, D.C., TLTA Federal Issues Chair Celia Flowers and member Janet Minke reiterated our views that:

1) Whatever changes are made, the forms should be standardized required-use forms rather than each lender having the ability to create their own form based on guidelines;

2) The settlement agent should maintain the role of completing the settlement portion of the form and their traditional functions that provide the consumer with a neutral third party in the transaction;

3) The discussed idea of lowering the tolerances from 10% to 0% for third parties who are either affiliated with the lender or on the lender’s provider list would likely have the adverse effect of driving the settlement function away from the settlement agent and in house to the lender. This would harm both title agents who have traditionally served this function and the consumers who have benefited from the neutral third party agent in the process.

4) The proposed 3-day waiting period could have the unintended consequence of delaying and complicating closings, which would create problems for consumers and increase costs for your company.

In addition to watching today's hearing and reading the testimony, we urge you to visit the CFPB website to study the current posted informal idea for a proposed form and read up on the goals of the CFPB to familiarize yourself in advance on this topic of critical importance to everyone in the title industry. We will keep you updated on this process and will definitely be calling on you to comment once the rule is published, so please stay tuned for more information in the very near future.