By a vote of 269-143, the U.S. House of Representatives on Wednesday passed a bill that corrects the inaccurate disclosure of title insurance premiums on the TILA-RESPA Integrated Disclosures (TRID) and help consumers understand the true cost of their real estate transaction. Under the current regulation, the CFPB does not allow title insurance companies to disclose available discounts for lenders title insurance on the government mandated disclosures. This results in the inaccurate disclosure of title insurance premiums in about half of the states, including Florida.
This Bill amends the Real Estate Settlement Procedures Act (RESPA) to require the Consumer Financial Protection Bureau (CFPB) to allow the accurate disclosure of title insurance premiums and discounts to homebuyers. “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, ALTA’s chief executive officer. “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.”
A survey conducted by ALTA in 2016, found that 40 percent of the consumers polled found the disclosure rule for title insurance confusing and deceptive. Nearly two dozen other trade groups have joined ALTA urging Congress to pass legislation that would correct the inaccurate disclosure of title insurance premiums. If the bill passes the full House, it still must go through the Senate. A potential vehicle to get the bill passed in the Senate is to get it amended to the Economic Growth, Regulatory Relief, and Consumer Protection Act (S. 2155).