Revealing AMC Fees Optional Under Proposed Disclosure Forms
On July 9, the Consumer Financial Protection Bureau released its proposed rule for mortgage disclosure forms designed to help consumers shopping for a home loan. The CFPB also showed the latest versions of its loan estimate form and its closing form.
Part of the CFPB’s “Know Before You Owe” mortgage project, the proposed rule includes two forms that borrowers will receive after applying for a mortgage but before closing on their homes.
The Appraisal Institute previously had expressed its support for the new forms, but asked that the CFPB separate the appraisal fee from the appraisal management company fee to alleviate any confusion regarding the fees.
However, the proposed five-page closing disclosure form, which includes a breakdown of closing costs, doesn’t require separate disclosure of the AMC fee and the appraisal fee, but rather provides the option to do so. It would be up to a closing agent to separate the fees on the form.
The three-page loan estimate form, which is designed to give consumers an easy way to compare loan estimates from different lenders and includes such information as loan amount, interest rate, projected payments and appraisal fee, also does not require separate mentions of the AMC fee and appraisal fee.
In a statement to the Appraisal Institute, the CFPB said “Our intention was simply to follow Section 1475 of the Dodd-Frank Act, which makes the (AMC fee) disclosure optional.”
Once the forms are finalized, lenders will be required to provide the loan estimate form to consumers within three business days of receiving a mortgage application, and the closing disclosure form within three days of closing.
The forms already have gone through 10 rounds of testing and tweaking based on thousands of public comments. More changes are possible, with the CFPB asking consumers to comment on the newest versions. The public has until Nov. 6 to review and provide feedback.
The Appraisal Institute is reviewing the proposed rule and forms and will develop a formal response.
View and comment on the proposed disclosure forms.