THE FORMS. The Loan Estimate: Truth in Lending Statement + Good Faith Estimate

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1 INFOBYTES SPECIAL ALERT: CFPB FINALIZES RULE COMBINING TILA AND RESPA MORTGAGE DISCLOSURES Updated t reflect amendments adpted by the CFPB n January 20, Significant amendments are nted belw in red fnt. On Nvember 20, 2013, the CFPB finalized its lng-awaited rule cmbining the mrtgage disclsures cnsumers receive under the Truth in Lending Act ( TILA ) and the Real Estate Settlement Prcedures Act ( RESPA ). 1 Fr mre than 30 years, the TILA and RESPA mrtgage disclsures had been administered separately by, respectively, the Federal Reserve Bard ( FRB ) and the U.S. Department f Husing and Urban Develpment ( HUD ). In 2010, the Ddd-Frank Wall Street Refrm and Cnsumer Prtectin Act ( Ddd-Frank Act ) transferred authrity ver TILA and RESPA t the Bureau and directed the Bureau t create rules and mdel disclsures that cmbine the disclsures required under [TILA] and sectins 4 and 5 f [RESPA], int a single, integrated disclsure fr mrtgage lan transactins cvered by thse laws. 2 Cngress did nt, hwever, amend TILA and RESPA prvisins gverning timing, respnsibility, and liability fr the disclsures, leaving it t the Bureau t reslve the incnsistencies. Unlike the Bureau s ther Ddd-Frank Act mrtgage rules, Cngress did nt impse a January 2013 deadline fr the TILA-RESPA Integrated Disclsure rule. Nevertheless, frm the utset, the Bureau made the prject the public centerpiece f its rulemaking effrts, annuncing its cmmencement in December 2010 and releasing the first prttype disclsures fr public cmment in cnjunctin with the beginning f cnsumer testing in May Over the next twelve mnths, the Bureau released nine additinal sets f prttype disclsures, cnducted nine additinal runds f testing, and cnvened its first Small Business Review Panel, culminating in the release f the prpsed rule in July Fllwing the prpsal, the Bureau cnducted additinal testing and develped Spanish-language and refinancing versins f the disclsures. Fr additinal backgrund, please review ur reprt n the rule as prpsed. EFFECTIVE DATE AND SCOPE The final rule generally applies t cvered transactins fr which the creditr r mrtgage brker receives an applicatin n r after August 1, The rule applies t mst clsed-end cnsumer mrtgage lans, althugh it establishes different requirements fr timeshares and cnstructin lans. The rule des nt apply t: Hme equity lines f credit 1 Bureau f Cnsumer Financial Prtectin, Final Rule, Integrated Mrtgage Disclsures under the Real Estate Settlement Prcedures Act (Regulatin X) and the Truth in Lending Act (Regulatin Z) (Nv. 20, 2013), (publicatin in the Federal Register frthcming) (hereinafter TILA-RESPA Integrated Disclsure Rule r TRID Rule ). The CFPB has als released a guide summarizing the rule: 2 Ddd-Frank Act 1032(f). 3 TRID Rule at p

2 Reverse mrtgages Mrtgage lans secured by a mbile hme r by a dwelling that is nt attached t real prperty 4 Lans made by a lender wh makes five r fewer mrtgages in a year 5 Certain n-interest secnd mrtgage lans made fr the purpse f dwnpayment assistance, prperty rehabilitatin, energy efficiency, r freclsure avidance 6 THE FORMS Use f the Bureau s frms is mandatry fr mst transactins and nly limited mdificatins are permitted. 7 Despite requests frm industry, the Bureau s regulatin and fficial interpretatins d nt specify which disclsures are subject t TILA liability and which are subject t RESPA liability. Instead, the Bureau stated that the detailed discussins [in the final rule s preamble] f the statutry authrity fr each f the integrated disclsure prvisins prvide sufficient guidance fr industry, cnsumers, and the curts regarding the liability issues raised by the cmmenters. 8 We will cntinue t study this issue. The Lan Estimate: Truth in Lending Statement + Gd Faith Estimate The Bureau s Lan Estimate cmbines sme f the disclsures that are currently prvided in the initial Truth in Lending ( TIL ) statement with the disclsures that are currently prvided in the RESPA Gd Faith Estimate ( GFE ). The frm als incrprates ther disclsures that are required by the Ddd-Frank Act r are currently prvided separately, such as the Ttal Interest Percentage required by TILA (as amended by the Ddd-Frank Act), the appraisal ntice required by the Equal Credit Opprtunity Act, and the servicing ntice required by RESPA. (click t enlarge) 4 12 C.F.R (e)(1)(i) and (f)(1)(i). Unless therwise nted, all citatins t the Cde f Federal Regulatins and the cmmentary are t revised versin adpted in the TRID Rule C.F.R (a)(17)(v). Thus, this lng-standing exceptin in Regulatin Z nw applies t prvisin f the RESPA 4 and 5 disclsures C.F.R (h) C.F.R (), (t). 8 TRID Rule at pp

3 The Clsing Disclsure: Truth in Lending Statement + HUD-1/1A Settlement Statement The Bureau s Clsing Disclsure cmbines the disclsures that are currently prvided in the final TIL statement with the disclsures that are currently prvided in the RESPA HUD-1 r HUD-1A settlement statement. Like the Lan Estimate, the frm als incrprates ther disclsures, including the new TILA negative amrtizatin and escrw accunt ntices. (click t enlarge) Initial Observatins The regulatin and fficial interpretatins prvide extensive, highly-detailed guidance n hw t fill ut the Lan Estimate and Clsing Disclsure. 9 In additin t the sample Lan Estimate abve (which is fr an interest-nly adjustable rate purchase lan), the Bureau prvided samples fr fixed-rate, ballnpayment, and negative amrtizatin purchase lans and fr a refinancing. 10 The Bureau als prvided tw variatins f page ne and fur variatins each f pages tw and three f the Lan Estimate t 9 See 12 C.F.R and and Official Interpretatins. 10 See Sample Frms H-24(B)-(F). 3

4 address the variable cntent requirements. Similarly, the Bureau prvided multiple samples f the Clsing Disclsure, including samples separating the brrwer and seller infrmatin fr privacy reasns. 11 Althugh ur analysis f the final rule is nging, we make the fllwing bservatins regarding the frms: Itemizatin: Unlike HUD s 2010 GFE, the Bureau s Lan Estimate requires the itemizatin f individual charges. The GFE prhibits separately disclsing the items that are cnslidated in, fr example, the riginatin charge. But the Lan Estimate mandates prviding a cnslidated figure n page 2 under the subheading f Originatin Charges, with an itemizatin f each amunt that the cnsumer will pay t each creditr and lan riginatr fr riginating and extending the credit. 12 These separately disclsed items may include, fr example, an applicatin fee, riginatin fee, underwriting fee, prcessing fee, verificatin fee, and rate-lck fee. 13 A cnslidated subttal and an itemizatin f individual amunts must als be prvided fr Services Yu Cannt Shp Fr and Services Yu Can Shp Fr. 14 The items listed as lan csts under these prvisins generally must be labeled using terminlgy that describes each item and listed alphabetically. 15 Disclsure f Discunt Pints: Under the subheading Originatin Charges n page 2 f the Lan Estimate, the pints paid t the creditr t reduce the interest rate must be disclsed as a separate line item, listed as bth a dllar amunt and as a percentage f the amunt f credit extended labeled as % f Lan Amunt (Pints). 16 A charge impsed t pay fr a lan level pricing adjustment ( LLPA ) assessed n the creditr, which the creditr passes n t the cnsumer as a charge at cnsummatin and nt as an adjustment t the interest rate, must be separately itemized. 17 Disclsure f Brker Cmpensatin: One f the mst significant revisins made t the GFE in 2010 was the emphasis placed n disclsing cmpensatin paid t a mrtgage brker by the lender as bth a charge t the cnsumer and a credit frm the lender. The Lan Estimate des nt disclse creditr-paid mrtgage brker cmpensatin in the same manner. Cnsumer-paid brker cmpensatin must be disclsed n the Lan Estimate as an individual line item under Originatin Charges n page Unlike the GFE, the CFPB des nt require (and, in fact, prhibits) disclsure f creditr-paid brker cmpensatin (e.g., cmpensatin t a lan riginatr paid indirectly by the creditr thrugh the interest rate) n the Lan Estimate. 19 On the Clsing Disclsure, brrwer-paid and creditr-paid cmpensatin are separately disclsed n page 2. Cnsumer-paid brker cmpensatin is disclsed as a Brrwer-Paid charge, whereas lender-paid brker cmpensatin is disclsed as a charge in the Paid by Others clumn. 20 De-emphasis f APR and Other TIL Disclsures: Based n cnsumer testing perfrmed by the FRB and the Bureau indicating that the traditinal TIL Bx disclsures f Annual Percentage 11 See Sample Frms H-25(B)-(J) C.F.R (f)(1). 13 Cmment 37(f)(1) C.F.R (f)(2, 3) C.F.R (f)(5) C.F.R (f)(1)(i). 17 Cmment 37(f)(1) C.F.R (f)(1) and Official Interpretatins. 19 Id C.F.R (f)(1) and Official Interpretatins. 4

5 Rate ( APR ), Finance Charge, Amunt Financed, and Ttal f Payments were nt helpful t cnsumers, the Bureau used its exceptin and adjustment authrity t mve the APR t the last page f the frms and t prvide the ther disclsures nly n the last page f the Clsing Disclsure. While these changes were supprted by industry, cnsumer advcates strngly ppsed the relegatin f the APR t the back page. Eliminatin f Average Cst f Funds: Based n its cnsumer testing, the Bureau used its exceptin authrity t eliminate the Average Cst f Funds disclsure required by Cngress in the Ddd-Frank Act, which wuld have required creditrs t disclse a figure representing the cst t the creditr f the funds used t make the lan. This disclsure was strngly ppsed by industry as being burdensme and unhelpful t cnsumers. THE RULES The Lan Estimate The Lan Estimate must prvide a gd faith estimate f the lan s csts and terms. 21 Until the Lan Estimate is prvided and the cnsumer indicates an intent t prceed with the transactin, a creditr cannt impse any fee ther than a bna fide and reasnable credit reprt fee. 22 A creditr is als prhibited frm requiring the cnsumer t submit dcuments verifying infrmatin relating t the cnsumer s applicatin until the Lan Estimate has been prvided. 23 Timing Requirements The Lan Estimate must be delivered r placed in the mail nt mre than three business days after receipt f an applicatin and nt less than seven business days befre cnsummatin f the transactin. 24 Tw definitins are critical t understanding this requirement: Applicatin. Under the final rule, an applicatin has been received fr purpses f triggering the bligatin t prvide the Lan Estimate nce the creditr receives six pieces f infrmatin: 1. The cnsumer s name; 2. The cnsumer s incme; 3. The cnsumer s scial security number t btain a credit reprt; 4. The prperty address; 5. An estimate f the value f the prperty; and 6. The mrtgage lan amunt sught C.F.R (e)(1)(i) C.F.R (e)(2)(i)(A) C.F.R (e)(2)(iii) C.F.R (e)(1)(iii) C.F.R (a)(3)(ii). 5

6 This represents a departure frm the definitin f applicatin that applies t the current RESPA GFE and initial TIL disclsures, which includes a seventh catch-all element that permits the lan riginatr t determine what ther infrmatin is necessary t cmplete the applicatin. 26 The CFPB acknwledged the difficulties assciated with eliminating the seventh catch-all element, but cncluded that creditrs can reslve thse issues by cllecting any ther infrmatin deemed necessary befre btaining all six pieces f infrmatin frm the cnsumer (e.g., by requiring the cnsumer t submit all ther infrmatin deemed necessary t prcess the applicatin befre btaining the cnsumer s scial security number). 27 Business Day. Business day has tw different meanings fr purpses f the Lan Estimate. Fr the requirement that the Lan Estimate be prvided within three business days f applicatin, business day means a day n which the creditr s ffices are pen t the public fr carrying n substantially all f its business functins. 28 Hwever, fr purpses f the seven business day waiting perid befre cnsummating the transactin, business day means all calendar days except Sundays and the legal public hlidays. 29 Althugh having multiple definitins is cnfusing, this distinctin benefits creditrs by allwing mre time t prvide the Lan Estimate withut lengthening the waiting perid after the Lan Estimate is prvided befre the lan may be cnsummated. The seven business day waiting perid may be waived r mdified if the cnsumer determines, after receiving the Lan Estimate, that the extensin f credit is needed t meet a bna fide persnal financial emergency. 30 Hwever, the Bureau retained the existing requirements fr such waivers r mdificatin, which require the cnsumer t give the creditr a dated written statement that: (1) describes the emergency; (2) specifically mdifies r waives the waiting perid; (3) bears the signature f all cnsumers wh are primarily liable n the legal bligatin; and (4) is nt a printed frm. 31 Because investrs have histrically been unwilling t purchase lans where the waiting perid has been waived r mdified, it is unclear whether this exceptin will be meaningful in allwing cnsumers t avid clsing delays. Respnsibility fr Prvisin The Lan Estimate must be prvided either by the creditr r the mrtgage brker wh received the cnsumer s applicatin. 32 Hwever, the creditr retains ultimate respnsibility and liability fr ensuring the Lan Estimate is prvided in accrdance with the rule, even if the mrtgage brker delivers it TRID Rule at See, e.g., TRID Rule at 132-3; see als cmment 2(a)(3)-1 ( This definitin des nt prevent a creditr frm cllecting whatever additinal infrmatin it deems necessary in cnnectin with the request fr the extensin f credit. ). In additin, if a creditr prvides a written estimate f terms r csts specific t a cnsumer befre the cnsumer receives the Lan Estimate, the creditr must clearly and cnspicuusly state at the tp f the frnt f the first page: Yur actual rate, payment, and csts culd be higher. Get an fficial Lan Estimate befre chsing a lan. 12 C.F.R (e)(2)(ii) C.F.R (a)(6). 29 Id C.F.R (e)(1)(v). 31 Id C.F.R (e)(1)(i)-(ii) C.F.R (e)(1)(ii). 6

7 Permissible Changes The Bureau generally retained the tlerance regime adpted by HUD in 2010, with certain adjustments. The Lan Estimate must prvide a gd faith estimate f the clsing csts. 34 An estimate is in gd faith if the charge paid by r impsed n the cnsumer des nt exceed the amunt riginally disclsed, except as fllws: 10% increase permitted fr certain third-party charges. A third-party service fee r a recrding fee may be estimated and will be cnsidered in gd faith if: The aggregate amunt f charges fr third-party services and recrding fees ultimately paid by r impsed n the cnsumer des nt exceed the aggregate amunt f such charges disclsed n the Lan Estimate by mre than 10%; The third-party service charge is nt paid t the creditr r its affiliate; and The cnsumer is permitted t shp fr the third-party service. 35 N limitatins n increases fr certain charges. The fllwing charges may be estimated and will be cnsidered in gd faith if they are cnsistent with the best infrmatin reasnably available t the creditr at the time the estimate is prvided, regardless f the amunt actually paid: Prepaid interest; Prperty insurance premiums; Amunts placed int an escrw, impund, reserve, r similar accunt; Charges paid t third-party service prviders selected by the cnsumer that are nt n the creditr s list f service prviders; and Charges paid fr third-party services nt required by the creditr, even if paid t an affiliate f the creditr. 36 Exceptins fr revisins t estimates. Unless a revisin is permitted fr ne f the reasns discussed belw, increases are nt allwed fr ther estimated charges, such as creditr and lan riginatr charges and charges paid t an affiliate f the creditr. In additin, fr unaffiliated third-party charges subject t the 10% limitatin, the aggregate amunt f such charges cannt increase by mre than 10% unless an exceptin applies. A creditr may increase an estimated charge beynd the limitatins discussed abve if the increase is due t any f the fllwing reasns: C.F.R (e)(1)(i) and (e)(3)(i) C.F.R (e)(3)(i)-(ii). A fee is nt cnsidered paid t a persn if the persn des nt retain the fee but instead passes it n t a servicer prvider. Cmment 19(e)(3)(i) C.F.R (e)(3)(iii). 7

8 Changed circumstances affecting eligibility r settlement charges. One f the fllwing changed circumstances affects the cnsumer s creditwrthiness r the value f the security r causes the estimated charge t increase: An extrardinary event beynd the cntrl f any interested party r ther unexpected event specific t the cnsumer r transactin; Infrmatin specific t the cnsumer r transactin that the creditr relied upn when prviding the Lan Estimate and that was inaccurate r changed after the disclsures were prvided; r New infrmatin specific t the cnsumer r transactin that the creditr did nt rely n when prviding the riginal Lan Estimate. 37 Cnsumer request. The cnsumer requests revisins t the credit terms r the settlement that cause an estimated charge t increase. 38 Interest rate dependent charges. The discunt pints, lan riginatr charges, and lan riginatr credits change because the interest rate was nt lcked when the Lan Estimate was prvided. On the date the interest rate is lcked, the final rule requires the creditr t prvide a revised Lan Estimate that includes the revised interest rate, discunt pints, lan riginatr charges and credits, and all ther interest rate dependent charges and terms. 39 Amendment: On January 20, 2015, the Bureau relaxed the timing requirement t prvide a revised Lan Estimate in cnnectin with an interest rate lck. The rule nw requires the revised disclsure t be prvided n later than three business days after the rate is lcked instead f n the date the rate is lcked. 40 Expiratin. The cnsumer des nt indicate an intent t prceed with the transactin within 10 business days after the Lan Estimate was prvided. 41 Delayed Settlement n New Cnstructin Lans. Fr new cnstructin lans where the creditr reasnably expects that settlement will ccur mre than 60 days after the initial Lan Estimate is prvided, the creditr may prvide a revised Lan Estimate, but nly if the riginal Lan Estimate states clearly and cnspicuusly that at any time prir t 60 days befre cnsummatin, the creditr may issue revised disclsures C.F.R (e)(3)(iv)(A)-(B) C.F.R (e)(3)(iv)(C) C.F.R (e)(3)(iv)(D). 40 See, e.g., Bureau f Cnsumer Financial Prtectin, Amendments t the 2013 Integrated Mrtgage Disclsures Rule under the Real Estate Settlement Prcedures Act (Regulatin X) and Truth In Lending Act (Regulatin Z) and the 2013 Lan Originatr Rule under the Truth In Lending Act (Regulatin Z) at p.34, (publicatin in the Federal Register frthcming) (hereinafter January 20 Amendment ) C.F.R (e)(3)(iv)(E) C.F.R (e)(3)(iv)(F). 8

9 Amendment: The riginal TRID Rule inadvertently prhibited the inclusin f the cnstructin disclsure n the Lan Estimate. On January 20, 2015, the Bureau amended the rule t permit creditrs t make this disclsure n page 3 under the Other Cnsideratins heading. 43 If an estimate is revised fr ne f the abve reasns, the creditr must prvide a revised Lan Estimate within three business days f receiving infrmatin sufficient t establish that the reasn applies. 44 Hwever, the creditr must nt prvide a revised Lan Estimate n r after the date it prvides the Clsing Disclsure. 45 Therefre, the cnsumer must receive the revised Lan Estimate nt later than fur business days prir t cnsummatin. 46 Fr unaffiliated third-party charges subject t the 10% limitatin, it appears that the final rule permits the creditr t prvide a revised Lan Estimate when such charges increase by less than 10%, regardless f whether this increase is due t a changed circumstance r ther exceptin. Hwever, unless these charges increase in the aggregate by mre than 10% due t a changed circumstance r ther exceptin, the revised Lan Estimate des nt re-set the 10% tlerance and the final charges will be measured against thse disclsed n the riginal Lan Estimate r n the last revised Lan Estimate that was based n a changed circumstance r ther exceptin. 47 The Clsing Disclsure The Clsing Disclsure generally must state the actual terms f the credit transactin, and the actual csts assciated with the settlement f that transactin. 48 If, hwever, infrmatin is nt knwn despite the creditr having exercised due diligence t btain that infrmatin, the creditr may disclse an estimate based n the best infrmatin reasnably available, even if the creditr knws that mre precise infrmatin will be available at r befre cnsummatin. 49 Timing Requirements The final rule requires that the cnsumer receive the Clsing Disclsure n later than three business days befre cnsummatin. 50 If the Clsing Disclsure is nt delivered in persn, it is presumed received three business days after it is placed in the mail, sent by , r therwise delivered. 51 Hwever, the creditr may rely n evidence that the cnsumer received the Clsing Disclsure earlier (e.g., the cnsumer s signed receipt f delivery by vernight mail r acknwledgment f receipt via ) See, e.g., January 20 Amendment at p C.F.R (e)(4)(i) C.F.R (e)(4)(ii). 46 Id. If the revised Lan Estimate is nt prvided t the cnsumer in persn, the cnsumer is cnsidered t have received it three business days after the creditr delivers r places it in the mail. Id. If there are less than fur business days between the time the revised Lan Estimate is required t be prvided and cnsummatin, a creditr may cmply with this requirement if the revised disclsures are reflected in the Clsing Disclsure. Cmment 19(e)(4)(ii) Cmment 19(e)(3)(iv)(A)-1.ii. 48 Cmment 19(f)(1)(i) Cmment 19(f)(1)(i)-2.ii C.F.R (f)(1)(ii)(A) C.F.R (f)(1)(iii); cmments 19(f)(1)(iii)-1 and Cmments 19(f)(1)(iii)-1 and -2. 9

10 Fr purpses f these requirements, business day means all calendar days except Sundays and the legal public hlidays. 53 The three business day waiting perid may be waived r mdified in the case f a bna fide persnal financial emergency, cnsistent with the standard discussed abve. 54 As discussed belw, the Bureau s final rule substantially relaxes the prpsed limitatins n changes t the amunts disclsed n the Clsing Disclsure. Nevertheless, this requirement means that the creditr and settlement agent must crdinate t btain the best infrmatin reasnably available fr each item n the Clsing Disclsure several days r even a week befre clsing in rder t ensure that the cnsumer receives the cmpleted frm three business days befre clsing. Respnsibility fr Prvisin The Clsing Disclsure must be prvided by either the creditr r a settlement agent. Hwever, as with the Lan Estimate, the creditr retains ultimate respnsibility and liability fr ensuring that the disclsure is prvided in accrdance with the rule. 55 Permissible Changes The requirements gverning changes t the terms and csts n the Clsing Disclsure vary depending n what item changes and when the change ccurs: Changes during the three business day waiting perid. In respnse t industry cncerns abut harmful clsing delays, the Bureau made substantial revisins t the prpsed rule, which wuld have required a revised Clsing Disclsure and an additinal three business day waiting perid fr mst changes. Under the final rule, if a change ccurs after the initial prvisin f the Clsing Disclsure but befre cnsummatin, the creditr is generally permitted t prvide a revised Clsing Disclsure at r befre cnsummatin. 56 The nly changes that require redisclsure and a new three business day waiting perid are: 1. A change in the APR f mre than 1/8 f 1 percentage pint abve r belw the disclsed APR r, if the transactin is irregular (e.g., multiple advances r irregular payment perids), a change f mre than 1/4 f 1 percentage pint; A change in the lan prduct (e.g., frm adjustable rate t fixed rate); 58 r 3. The additin f a prepayment penalty. 59 Changes after cnsummatin. If during the 30 calendar days fllwing cnsummatin an event in cnnectin with the settlement ccurs that causes the Clsing Disclsure t becme C.F.R (a)(6) C.F.R (f)(1)(iv) C.F.R (f)(1)(v) C.F.R (f)(2)(i). The cnsumer must be permitted t inspect the Clsing Disclsure, cmpleted with all infrmatin knwn t the creditr at the time f the inspectin, during the business day immediately preceding cnsummatin, but the creditr may mit frm the inspectin items relating nly t the seller s transactin. 12 C.F.R (f)(2)(i) C.F.R (f)(2)(ii), 22(a) C.F.R (f)(2)(ii), 37(a)(10) C.F.R (f)(2)(ii). 10

11 inaccurate and the inaccuracy results in a change t an amunt actually paid by the cnsumer (e.g., the fee charged by the recrder s ffice after clsing fr recrding the security instrument differs frm the amunt disclsed and paid at clsing), the creditr must prvide a crrected Clsing Disclsure within 30 calendar days f receiving infrmatin sufficient t establish the event. 60 If the Clsing Disclsure cntains nn-numeric clerical errrs, the creditr must prvide a crrected Clsing Disclsure n later than 60 days after cnsummatin. 61 Curing Tlerance Vilatins. If the estimated csts disclsed n the Lan Estimate increase the beynd the permitted levels and the cnsumer pays thse amunts at cnsummatin, then n later than 60 days after cnsummatin the creditr must (1) refund the excess payment t the cnsumer; and (2) prvide a crrected Clsing Disclsure reflecting the refund. 62 Other Issues All-In APR: In the face f strng industry ppsitin and a mixed reactin frm cnsumer advcates, the Bureau did nt adpt the prpsed amendments adding additinal csts (such as title insurance) t the finance charge. If adpted, these amendments wuld have simplified the prcess f calculating the finance charge but als significantly increased APRs and, as a result, the number f lans cnsidered high-cst r higher-priced unless the Bureau als made adjustments t thse threshlds. The amendments culd have als decreased the number f Qualified Mrtgages that are eligible fr the safe harbr. The Bureau did, hwever, state that it wuld reexamine this issue as part f the five-year review required by the Ddd- Frank Act fr majr rules. Recrd Retentin and Electrnic, Machine-Readable Frmat Requirement: The final rule generally requires creditrs t retain evidence f cmpliance fr three years after the later f cnsummatin r the date a disclsure r ther actin is required. The final Clsing Disclsure, hwever, and any related dcuments must be retained fr five years after cnsummatin by the creditr r any assignee. 63 In respnse t strng industry ppsitin, the Bureau did nt adpt its prpsed requirement that creditrs maintain evidence f cmpliance in an electrnic, machine readable frmat. The Bureau emphasized, hwever, that it wuld cntinue t wrk with industry and the GSEs t prmte the develpment f electrnic frms and t reduce the amunt f paper used in the clsing prcess. * * * Questins regarding the matters discussed in this Alert may be directed t any f ur lawyers listed belw, r t any ther BuckleySandler attrney with whm yu have cnsulted in the past. Benjamin K. Olsn, (202) , blsn@buckleysandler.cm Clintn R. Rckwell, (310) , crckwell@buckleysandler.cm Jeffrey P. Naimn, (202) , jnaimn@buckleysandler.cm Jhn P. Krmer, (202) , jkrmer@buckleysandler.cm Jseph M. Klar, (202) , jklar@buckleysandler.cm Jeremiah S. Buckley, (202) , jbuckley@buckleysandler.cm Jseph J. Reilly, (202) , jreilly@buckleysandler.cm Jnathan W. Cannn, (310) , jcannn@buckleysandler.cm Brandy A. Hd, (202) , bhd@buckleysandler.cm C.F.R (f)(2)(iii) C.F.R (f)(2)(iv) C.F.R (f)(2)(v) C.F.R (c). 11