If you have been feeling totally stressed out by the seemingly endless regulatory changes, we actually have some good news for a change! The Federal Reverse Board recently announced that it was withdrawing three regulatory proposals under Regulation Z. These proposals dealt primarily with the following:
Closed-end secured by a real property or a dwelling (Issued August 26, 2009) – This proposal sought to require additional disclosure requirements for these types of loans. Specifically, additional disclosures at application, transaction specific disclosures required within three business days of application to summarize key loan terms and changes to the calculation of the Annual Percentage Rate and the finance charge would be revised to be more comprehensive (aka, make all fees a finance charge). It also sought to impose a “final” TIL disclosure provided at least 3 business days before closing.
HELOCs (Issued August 26, 2009) – This proposal sought changes to the format, timing and content requirements for HELOC disclosures, specifically, the disclosures at application; disclosures at account opening; periodic statements; and, change-in-terms notices. Changes were also proposed to the disclosures provided at application and would implement new disclosures to be provided within 3 business days after application. Disclosures would also be required to include significant transaction specific rates and terms.
Rescission (Issued September 24, 2010) – This proposal sought to revise the rules for the consumer’s right to rescind certain open-end and closed-end loans secured by the consumer’s principal dwelling. In addition, the proposal contains revisions to the rules for determining when a modification of an existing closed-end mortgage loan secured by real property or a dwelling is a new transaction requiring new disclosures. Additionally, changes were proposed for Higher Priced Mortgage Loans, refunds of fees, disclosures and prohibitions for reverse mortgages.
Keep in mind that while the FRB is withdrawing these proposals it doesn’t necessarily mean they will go away for good. The FRB withdrew these proposals as the changes will be covered by the Dodd-Frank Act and will resurface under the new Consumer Protection Agency. Hey, at this point let’s be happy with what we can get!