Legal
MAR Legal Staff, 8/3/2016
Michael McDonagh, MAR General Counsel
Ashley Stolba, MAR Associate Counsel
Justin Davidson, MAR Legislative & Regulatory Counsel
August 2016
Q. Overall, the changes to the Truth in Lending Act (“TILA”) and Real Estate Settlement Procedures Act (“RESPA”) that went into effect October 3rd, 2015 are going well. The problem that I run into, though, is that often times the lender refuses to share the closing disclosure document (“CD”) with me. We used to always get a copy of the HUD statement before the closing and I would review it with my client. Why won’t the lender let me have a copy of the CD?
A. Many lenders have chosen to withhold the CD from real estate agents, despite a longstanding tradition of sharing the HUD-1 statement with them. This issue has created frustration of real estate agents, attorneys, and homeowners throughout the country because many agents review this document with their clients before the closing.
Earlier this year, the Consumer Finance Protection Bureau announced that it was considering changes to these rules, including a clarification of the rules regarding sharing the CD, and requested comments from the industry. Advocates of the National Association of Realtors® attended listening sessions and wrote a letter to CFPB encouraging the Bureau to allow the CDs to be made available to real estate agents. That letter can be found here: http://www.narfocus.com/billdatabase/clientfiles/172/3/2669.pdf.
We are happy to report that on July 28, 2016, the CFPB listened to the industry’s concerns and changed their rules to allow the CD to be shared with real estate agents. It stated that, "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 CFPB’s changes to the rules can be found here: http://www.consumerfinance.gov/policy-compliance/rulemaking/rules-under-development/amendments-federal-mortgage-disclosure-requirements-under-truth-lending-act-regulation-z/. For more information on TILA/RESPA, please visit: http://www.realtor.org/topics/trid-tila-respa-integrated-disclosure.
Q: I heard that there was a proposal in the Massachusetts Legislature that would require homeowners to have Mass Save Energy Audits in order to sell their home. Did that pass?
A: Thanks to the advocacy of Realtors® throughout the state, no. Included in the Senate’s Energy Diversity legislation was a proposal to require a homeowner to have their home inspected for energy and graded prior to being able to sell it. Although Realtors® value energy efficiency, this mandate would simply be unfair to most residents of the Commonwealth, especially those in low-income communities. We are happy to report that the Legislature listened to our concerns and on July 31, 2016, the last day of the legislative session, it passed the bill without the mandatory energy audit and labeling provisions. Energy efficiency is extremely important and all Realtors® should advise their clients of the benefits of voluntary energy programs included Mass Save. For more information on the program, please visit: http://www.masssave.com/. For more information on MAR’s position on the proposal, please visit: www.noenergygrade.com.