TRID Rescission Waiver Rule & ECOA Valuations FAQ
On April 29, 2020, the Consumer Financial Protection Bureau (CFPB) released additional information which Director Kathleen Kraninger said she hopes “will help consumers facing financial emergencies obtain access to mortgage credit faster.” The new guidance impacts waiver of rights of rescission, good faith closing costs estimates, and ECOA valuations delivery timing requirements in connection with potential urgent consumer finance transactions.
“Temporary & Targeted Solutions.”
Mortgage lenders will need to be aware of this new interpretive rule and FAQ guidance and adjust their operations accordingly. Consumers who are accessing the COVID-19 resources center on the CFPB website likely will be aware of these potential ways to expedite transactions and will be expecting lenders to act accordingly. Key bases for the new rules include COVID-19 pandemic related “bona fide personal financial emergency” or “changed circumstances.”
TRID/ Reg Z Interpretive Rule – Modification or Waiver of Right of Rescission Timing
TILA RESPA Integrated Disclosure (TRID) rules protect borrowers by allowing them to receive information so they can “know before they owe.” Borrower exercise of three day rescission rights has been an issue of confusion and substantial litigation over the years. The new Rule may yield similar disputes in the future because of the evolving nature of the pandemic related financial hardship and the timing pressures involved. It also will be interesting to see how this temporary rule may influence either extension or sunset of current CARES Act foreclosure prohibitions.
The new Rule provides that “(1) if a consumer determines that the extension of credit is needed to meet a bona fide personal financial emergency, (2) the consumer’s brief statement describing the emergency identifies a financial need that is due to the COVID-19 pandemic, and (3) the emergency necessitates consummating the credit transaction before the end of an applicable TRID Rule waiting period or must be met before the end of the Regulation Z Rescission Rules waiting period, then the consumer has a bona fide personal financial emergency that would permit the consumer to utilize the modification and waiver provisions…”