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Are You Prepared to Launch Your Flight to Quality?

reconis flight quality 01It is at best a bizarre situation. As this article is being prepared, the American residential real estate industry is but 213 days from an event that many experts believe may be the industry's seminal moment for the decade. The centerpiece and stimulus for all of this activity is the Consumer Financial Protection Bureau (CFPB). The 1,888-page RESPA-TILA (Truth in Lending Act) Integrated Mortgage Disclosures Rule issued in 2014 by the Consumer Financial Protection Bureau will probably not end the residential real estate business as we know it, but it will certainly change the way it currently operates.

When the RESPA-TILA rule takes effect (currently slated to take effect in August of 2015) it will integrate information currently provided to consumers in four separate documents to satisfy the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA), boiling it down to two documents: a loan estimate and closing disclosure.

As most of our readers already know, the Dodd Frank Wall Street Reform and Consumer Protection Act created the CFPB during the 2010 congressional session. The agency began operations in 2011. It hit the ground running with a campaign directed at debugging the national student loan act.

Its noteworthy and unfettered staff includes an unusual number of young "go getters," many fresh out of college, without the "industry" baggage that has crippled so many prior efforts to "make a regulatory difference." During those first few years, it managed to find the time to draft, approve and implement thousands of pages of new procedures, rules and regulatory edicts. Even when assaulted by constant political attacks regarding the Bureau's purpose and methodologies, it quickly became an effective regulator and attacked some of the country's most outrageous consumer traps. The agency next went after the credit card, automobile loan and mortgage industries. One of its current targets is the residential real estate industry.

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