Bloomberg Reports Change To CFPB Proposed Title Disclosure Requirements

21 Nov yesterday reported that a U.S. rule that would have wrapped title insurance into the total costs listed on a simplified mortgage-disclosure form was dropped by the Consumer Financial Protection Bureau after industry complaints.


The rule first proposed by the consumer bureau in July 2012 would have incorporated these costs into the calculation of the annual percentage rate on a simplified new mortgage disclosure form. The agency backed down after feedback suggested that the all-in APR, is the rule is known, “might have affected the types of loans available to consumers,” it said in an e-mailed statement today.


The APR feeds into calculations under other regulations that determine whether a mortgage is a higher-priced loan. If a higher APR pushes a loan into that category, lenders could be more vulnerable to lawsuits under a separate CFPB rule that takes effect in January.

“We applaud the CFPB for listening to our members and eliminating the ‘all in’ APR as it would not help consumers shop for a mortgage and could limit their settlement choices,” Michelle Korsmo, chief executive officer of the American Land Title Association, a Washington-based trade group, said in a statement.

Willard Ogburn, executive director of the Boston-based National Consumer Law Center, criticized the CFPB’s decision to step back from its initial proposal.

“There is no evidence that better disclosure restricts access to credit,” Ogburn said at a CFPB field hearing in Boston where the new form requirements were introduced today. “Instead, it creates a more transparent and well-functioning market, which enables consumers to avoid abusive lenders.”

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