The housing industry is applauding the House passage of the TRID (TILA-RESPA Integrated Disclosure) Improvement Act of 2017 (H.R. 3978) that aims to correct the disclosure of title insurance premiums, which are inaccurate in the majority of states. The bill, which was made part of a larger package, was passed on Wednesday.
“Although the bill has been made part of a larger legislative package, the genesis of the bill is about improving transparency and making sure consumers receive disclosures that accurately show the cost of the one-time fee that protects their property rights,” said Michelle L. Korsmo, CEO of the American Land Title Association (ALTA), in a statement. “Our research shows that 40 percent of consumers feel confused by the CFPB’s requirement to provide inaccurate pricing on title insurance. We’re thankful for Representative French Hill championing a straightforward fix that benefits consumers across the country. This isn’t about limiting Dodd-Frank. We’re eager to get this bill introduced and passed in the Senate and eliminate the inconsistencies in mortgage documents that cause confusion for consumers.”
“I…want to praise Representatives French Hill and Ruben Kihuen for Title I of the bill (the prior H.R. 3978) which will require the Consumer Financial Protection Bureau to allow the accurate disclosure of title insurance premiums and any potential available discounts to homebuyers,” said David H. Stevens, CEO and president of the Mortgage Bankers Association (MBA), in a statement.
In most states, the Consumer Financial Protection Bureau (CFPB) bars the calculation of a “simultaneous issue” rate. Consumers are given a simultaneous issue rate—a discount, in effect—when they obtain a lender’s and owner’s title insurance policy at the same time.
“Consumers deserve to know the costs of their title insurance premiums when they purchase a home,” said Congressman French Hill in October, when the bill was introduced. “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.”
Hill introduced the legislation alongside Congressman Ruben Kihuen. TRID, colloquially known as “Know Before You Owe,” became effective in October 2015.
Stay tuned to RISMedia for more developments.