CFPB clarifies that real estate brokers or agents can receive Closing Disclosure

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.

In a news release about the finalized amendments, the CFPB included the following about privacy and sharing of information:

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®.

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6 Responses to CFPB clarifies that real estate brokers or agents can receive Closing Disclosure

  1. Rick DeVoss says:

    There are several reasons why the CD should be given to the Real Estate Agent.
    > First of all, the Loan Officer does Not represent the borrower as a client. The Realtor may be legally representing the buyer, and how can you give professional advice if you don’t even have access to the numbers on the settlement statement…?
    > Most loan officers I have seen either Do not explain the CD numbers to the buyer, or Can not explain them to the buyer. The form itself is not totally obvious to the average person buying their first house, contrary to the opinion of the CFPB.
    > And how many of us have detected errors or omissions on a settlement statement…?
    I recently observed an error made by a lender (from California) which actually violated VA rules. If the buyer had not forwarded the CD to me for review, it might not have been caught, as the title company refused to challenge the lender on the subject. Neither the loan officer, nor the escrow officer, would admit that an error had been made. …And it cost the buyer money.
    …Where is the CFPB when you really need them…?

    Liked by 1 person

  2. Janet says:

    Ditto! How can an agent feel confident about the terms of the agreement they have worked through so intricately with their clients being reflected Correctly if we are not privy to the cd that the buyer is approving? With the increase in real estate transactions in Texas many title companies have not increased their staff to meet the challenge. As a result I am finding more mistakes than ever on closing documents. As a buyer’s agent, my clients expect me to provide that assurance that they are safe in signing when they go to the closing table and are assuming figures are correct.


  3. Stuart Scholer says:

    Rick is so correct. The only fiduciary for the Buyer and/or Seller has effectively been cut out of the deal. I have had multiple experiences of Title Companies adding on “Optional” boundary and survey coverage onto the transaction. The Closer usually does not (or are not able or willing) to explain the coverage unless I call them out on it. The problem is I cannot advise my Client what to do because it could be construed as Legal Advice. All I can do is advise my Client that the coverage is not required by the Lender and that they are not required to buy it. This always happens at the closing table because the Agent has been cut out of the deal until this moment at the table. It is always awkward and usually the Buyer just buys the extra coverage out of fear and not as a result of an informed judgement. I also have experienced Closers that don’t want to review the CD because the Buyer has already gone over it with the LO and the Closer wants to “move on”. But invariably when we DO go over the CD there are questions from the Buyer… usually out of ignorance or confusion… but definitely legitemate questions that deserve answers. Most of this could be (and WILL be) eliminated when the Principal’s only explicit fiduciary is allowed back into the transaction. How this situation has continued up until now just amazes me.

    Liked by 1 person

    • Rick DeVoss says:

      Thank you, Stuart. It has amazed me from the very beginning that the CFPB thinks they have revolutionized the practice of real estate, and solved all of the borrower’s/buyer’s problems. Maybe they should hire some Realtors on their staff, instead of a bunch of attorneys who are keen on fining the mortgage companies for their slip ups.
      Very few buyers are so knowledgeable of the details of the transaction that they can figure it all out and understand everything just by reading a form designed by a government agency. (It is so quirky that even an Agent has a problem explaining it.) I find it to be ludicrous that they think they have “protected” the buyer by sending him an email and giving him only 3 days to hurry up and sign it and send it back. No where in the instructions does it say that you should consult with your Real Estate Agent or your attorney before signing the complicated document. Most buyers are so frustrated at that point, that they just sign it, and don’t even notify their Realtor that they got it. They may even feel bullied by the lender’s staff.
      Previously, most title companies did a good job of preparing the settlement statement, and they shared it with the Realtor. In today’s world, there are very few lenders who have a staff experienced enough to understand all the ins and outs of the CD, AND be able to explain it properly to the borrower. But there is No Excuse for not getting the Realtor involved as the buyer’s educator and protector. In most transactions, the Realtor is the only person who knows everything that has gone on since day #1, and has the ability to pull it all together so that it makes sense to the buyer. (Or the seller.)
      > It would be my guess that the staff at many mortgage companies has a greater turn over than the staff at most title companies. Every time they bring in a new person to process a loan, there is a new learning curve. ~And these are the people that the CFPB has entrusted to be able to educate the buyer on everything having to do with the money! (It’s like letting the Fox count the chicken’s eggs…)
      It’s OK to govern the lending process, and it’s OK for the state insurance board to oversee the title industry’s procedures, but everyone needs to remember that the Real Estate Agent is the one who has the buyer’s trust, and is the Only one who is looking out for the buyer’s best interests.
      ~If attorneys were representing the buyers (instead of Agents, like in Texas), I’ll bet you there would have been many law suits filed against the CFPB a long time ago!


  4. The confusion seems to be that the Consumer Finance Protection Bureau is actually there to protect consumers. I have seen no evidence of this and the length of time it has taken them to correct this unintended consequence of omitting the broker or agent from the disclosure distribution list is a case in point.


  5. Greg Nix says:

    I am in total agreement that realtors should receive an advance copy of the CD. I am in the title business and do not like the fact that we have to be the “police” for who can and cannot see the CD. That said, I am not sure this “announcement” clears the way for us to give realtors the CD. Read the News Release carefully (the portion TAR posted), and you will see that there is nothing definitive there. The last sentence is very vague.

    “The Bureau is finalizing additional commentary to clarify how a creditor may provide separate disclosure forms to the consumer and the seller.”

    The sentences above that start “The Bureau has received…”, and, “The Bureau understands…”. Nothing says the Bureau has decided or allowed for the sharing of the CD with parties outside the consumer and the seller.

    What our company does is provide a Master Settlement Statement to the realtors, showing all of the charges to the Borrower and the Seller. It definitely looks different than the CD, and, it does not contain the information that is considered NPI. We will continue to so do until the CFPB or the Lenders are more definitive in their guidance for title companies.


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