CFPB Proposes New Alternative Mortgage Disclosures for Construction Loans

Recently, the CFPB requested public comments regarding alternative TRID mortgage disclosures for construction and construction-to-permanent loans proposed by the Independent Community Bankers of America (ICBA) pursuant to the CFPB Disclosure Sandbox and CFPB’s revised Policy to Encourage Trial Disclosure Programs.  The ICBA application states that in many rural communities, due to lack of “starter homes,” it is not uncommon for first-time homebuyers to choose to build their own home.  In light of this trend, ICBA proposes to modify and expand the current Loan Estimate and Closing Disclosure to include improved construction phase detail, construction cost breakdown, and improved disclosure regarding the consumer’s permanent loan financing.  ICBA believes that consumer understanding would improve with disclosures that are more closely tailored to accommodate construction, and construction-to-permanent loans.  If the template application is approved, individual lenders may then apply to enroll in an in-market pilot test, but the template itself would not provide permission to conduct a trial disclosure program and would not bind the CFPB to grant initial applications.

Comments must be submitted by March 29, 2023, and must include the documents title and docket number (Docket No. CFPB-2023-0016).