Should Mortgage Lenders Disclose Charges for Title Insurance Premiums at Closing? (H.R. 3978)
Do you support or oppose this bill?
What is H.R. 3978?
(Updated February 8, 2019)
This bill would direct the Consumer Financial Protection Bureau (CFPB) to require mortgage lenders to disclose discounted rates that are available to consumers for title insurance premiums and to itemize all actual charges imposed on borrowers in the closing documents for mortgages. The CFPB’s TRID rule currently requires disclosures of loan terms and costs to consumers at the beginning and closing of mortgage transactions, and doesn’t allow the calculation of discounts provided when consumers buy a lenders and owners title insurance policy simultaneously. (The TRID rule is also known as the Know Before You Owe rule.)
Argument in favor
This commonsense, bipartisan bill would ensure that mortgage borrowers have a clear view of the costs of their title insurance premiums when they buy a home.
Argument opposed
Congress shouldn’t change this Consumer Financial Protection Bureau rule through legislation, as it’d take away the CFPB’s ability to make this and other changes.
Impact
Mortgage borrowers; lenders; and the CFPB.
Cost of H.R. 3978
The CBO estimates that enacting this bill would cost less than $500,000 for the CFPB to issue the rule implementing the change.
Additional Info
In-Depth: Sponsoring Rep. French Hill (R-AR) introduced this bill to modify mortgage disclosures to clarify mortgage closing costs for consumers and provide regulatory relief to lenders:
“Consumers deserve to know the costs of their title insurance premiums when they purchase a home. As TRID has become a massive, complex rule, it is hindering financial institutions’ ability to share accurate information to consumers during the mortgage closing process. This legislation seeks to correct this error by ensuring that consumers know the exact cost of their title insurance — not the number reported as one price on a lending estimate and another price on a closing document.”
Some House Democrats expressed opposition to this bill in its committee report:
“[This bill’s] prescriptive changes to the TRID forms would also remove the Consumer Bureau’s ability to amend the regulation. This could cause unintended consequences greater than the issues that the legislation seeks to address, since the Consumer Bureau would no longer have the authority to quickly adjust TRID regulations if a problem with H.R. 3978 arises.”
This legislation passed the House Financial Services Committee on a 53-5 vote and has the support of 18 bipartisan cosponsors, including 13 Republicans and five Democrats.
Media:
Summary by Eric Revell
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