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Consumer Financial Protection Bureau

ALTA Hosts Successful Roundtable with CFPB on New HUD-1

June 19, 2012

More than 40 ALTA members from around the country met with staff from the Consumer Financial Protection Bureau (CFPB) on June 7 in Washington, D.C., to discuss the Bureau’s efforts to create new integrated mortgage disclosures that will replace the current TIL, GFE and HUD-1.

The CFPB is currently developing the forms and rules to carry out the Dodd-Frank Act, and is seeking input from industry professionals and the public at large on how to best service both consumers and agents in this matter. The Bureau is expected to publish its draft ruled on July 21.

The two-hour roundtable discussion allowed ALTA members to tell CFPB staff members Ben Olson and David Friend their concerns on the CFPB choosing to issue a model form instead of a mandatory form as preferred by ALTA, what happens when either party (lender or settlement agent) fills out the others disclosures, how tolerance works today, how average charge is used, the provider list and the idea of three-day advance preparation.

“The meeting reminded me how effective we can be when our message is focused on the best interests of the consumers,” said Michelle Korsmo, ALTA’s chief executive officer. “This was a wonderful event, and we are hopeful to hold similar events once the rule is published.”

Shelley Stewart, president of Southern Title Holding Co. in Florida, was thrilled ALTA organized the meeting to provide agents an opportunity to meet one-on-one with CFPB representatives.

“This open forum provided agent members the opportunity to present our questions and openly discuss our concerns directly with the CFPB in connection with the forthcoming TILA and Settlement Statement revisions,” she said. “I was very impressed with their interest and willingness to hear title agent concerns. While the end product remains to be seen, I am grateful for the opportunity to share my views directly with CFPB.” Stewart added it was evident that ALTA has forged a great dialogue with CFPB staff.

“It is comforting to know that our national trade association is working, behind the scenes, each and every day, on issues that are critical to our industry,” Stewart said. “Without ALTA’s aggressive involvement with the CFPB, the outcome of the Proposed Rule to integrate mortgage disclosures under RESPA and TILA would have a dramatically different result on the title industry. To that end, we need to assure that we maintain an open dialogue with the CFPB in the future.”

ALTA members identified numerous problems that would likely arise if a model form was adopted. Similar to the current unique closing instructions promulgated by individual lenders, a model form system would likely mean that settlement agents would be faced with unique disclosure forms from each lender. This would increase costs in several ways, including the expense of training agents on the requirements of each form, as well as increased software costs associated with developing software capable of creating custom forms. The Dodd-Frank Act, however, requires the CFPB to develop a model form, which may limit the Bureau’s ability to require that a standard form be implemented. Therefore, it is imperative for ALTA members to contact both the CFPB and Congress for action on this matter.

In regard to who should present the disclosures to buyers—lenders, settlement agents or a combination of the two—the consensus was that requiring settlement agents to provide all disclosures would protect the industry from potential business encroachment from lenders. However, attendees voiced concern with regard to the liability risk associated with making TILA disclosures. It was noted that because title agencies specialize in local laws, they are more suited to ensure total compliance. However, additional time spent by settlement agents to provide disclosure at closing will increase closing costs for consumers. ALTA members are urged to provide the CFPB detail regarding the additional expenses this will add to the closing process, including costs to come into compliance and long-term ongoing costs.

Test forms that the CFPB has authored in the last few months have suggested that the bureau may reduce the tolerance for fluctuations in figures between certain disclosures made three days before closing and disclosures made the day of closing from ten percent to zero percent. The CFPB stressed that the current exceptions to this tolerance requirement, such as changed circumstances of the buyer, will remain intact in the future. ALTA members at the meeting described the difficulty in attaining zero percent tolerance in these figures. Industry members are urged to provide information to the CFPB regarding the problems with complying with a zero percent tolerance.

When providing feedback to the CFPB, Korsmo reminds ALTA members to explain in detail how the changes will add additional expense to the closing and impact consumers. If you have any questions about the roundtable, contact ALTA’s Legislative and Regulatory Counsel Steve Gottheim.

To get involved with ALTA’s advocacy efforts regarding the new mortgage disclosures, sign up for the Title Action Network.

To provide the CFPB with comments on this issue, go to

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