On October 12, 2016, the Consumer Financial Protection Bureau (“CFPB”) provided updated versions of the Know Before You Owe mortgage disclosure rule Small Entity Compliance Guide (“SECG”) and the Guide to Loan Estimate and Closing Disclosure Forms (“GTF”). The updates represent the fourth revisions to the Guides, which were originally published in April, 2014. According to the CFPB, the updated Guides incorporate guidance from existing webinars to add clarity on various topics. The updated Guides do not reflect the proposed amendments published by the CFPB on July 29, 2016, for which the public comment period expired on October 18th. Below are some of the highlights contained in the updated Guides: Section 10.7 of the SECG is updated to provide that seller-paid Loan Costs and Other Costs are required to be disclosed on page 2 of the consumer’s Closing Disclosure, regardless of whether a separate Closing Disclosure is provided to the seller. Examples of these costs include, but are not limited to, seller-paid real estate commissions and non-commission real estate brokerage or agent charges for services to the seller or consumer. This requirement was initially discussed in the CFPB’s April 12, 2016 webinar, in which the CFPB referred to 1026.38(t)(5)(v)(B) as authority for leaving information regarding the consumer’s Loan Costs and Other Costs blank on the seller’s Closing Disclosure but not providing the same authority with respect to omitting the seller’s Loan Costs and Other Costs on the consumer’s Closing Disclosure.
