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Consumer Financial Protection Bureau Releases Assessment of TRID Mortgage Loan Disclosure Rule

Research examining changes to terms and cost of a mortgage loan during the origination process also released

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (Bureau) today published an assessment of the TRID Integrated Disclosure Rule (the Truth in Lending Act and Real Estate Settlement Procedures Act). The assessment found that the TRID Rule made progress towards several of its goals.

The evidence available for the assessment indicates that the TRID Rule improved consumers’ ability to locate key information, compare terms and costs between initial disclosures and final disclosures, and compare terms and costs across mortgage offers. Evidence was mixed, but leans positive, regarding whether the Rule improved consumer understanding of forms.

The assessment also found that the Rule resulted in sizeable implementation costs for companies. Firms also reported increases to their ongoing costs; however, it is unclear if these increases are due to ongoing trends or if these increases can be attributed to the Rule. The report examined potential effects on a range of market outcomes, such as interest rates and origination volumes, and found either no change or relatively short-lived changes in these measures around the Rule’s effective date.

The assessment was conducted in accordance with Section 1022(d) of the Dodd-Frank Act that requires the Bureau to assess significant rules or orders adopted under Federal consumer financial law. An assessment must address, among other relevant factors, the rule’s effectiveness in meeting the Dodd-Frank Act’s purposes and objectives and the specific goals stated by the Bureau in issuing the rule. An assessment must reflect available evidence and any data that the Bureau reasonably may collect, and the Bureau must invite public comment on recommendations for modifying, expanding, or eliminating the rule.

In addition, the Bureau published a Data Point examining how the terms and costs of a mortgage loan may change during the origination process as reflected in the Loan Estimate and Closing Disclosure forms provided to borrowers pursuant to the TRID Rule. The research examined data for about 50,000 mortgages, though they may not be representative of all mortgages. The research found that almost 90 percent of mortgage loans involved at least one revision, 62 percent received at least one revised Loan Estimate, and 49 percent received at least one corrected Closing Disclosure. Additionally, the report found that the prevalence of changes in loan terms between the first Loan Estimate and the last Closing Disclosure varied greatly across loan terms: APR changes occurred in more than 40 percent of mortgages; loan amount and the loan to value ratio changed for almost 25 percent of mortgages; and interest rate changed for eight percent of mortgages.

The report also summarizes public comments for modifying, expanding, or eliminating the rule. The Bureau will take the public comments as well as the findings of the assessment into account in determining whether there might be changes to the rule that would strengthen the rule’s benefits or reduce its costs.

The TRID Rule Assessment Report issued today is available at: https://files.consumerfinance.gov/f/documents/cfpb_trid-rule-assessment_report.pdf

The Data Point is available at: https://files.consumerfinance.gov/f/documents/cfpb_data-point_how-mortgages-change-before-origination.pdf

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The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by regularly identifying and addressing outdated, unnecessary, or unduly burdensome regulations, by making rules more effective, by consistently enforcing federal consumer financial law, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.