The Consumer Financial Protection Bureau (CFPB) is requiring all lenders to implement new disclosure forms for most mortgage loans applied for starting October 3, 2015. From the consumer’s point of view some of the changes you may see:
- A new “Loan Estimate” will replace the old Good Faith Estimate (GFE) and preliminary Truth-In-Lending (TIL) which will merge the disclosures previously provided into one comprehensive form.
- New timing requirements will be imposed on lenders, including
- A requirement that lenders issue the Loan Estimate within three (3) days of applica
- A requirement that lenders issue the Revised Loan Estimate within three (3) days of notice of any change in the transaction that triggers a change in the Loan Estimate;
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- A prohibition on closing until seven (7) days after the consumer has received the Loan Estimate.
- A new “Closing Disclosure” will replace the old HUD-1 Settlement Statement and the final Truth-In-Lending (TIL). Again merging the disclosures previously provided into one comprehensive form.
- New timing requirements will be imposed on lenders WHICH MAY DELAY CLOSING DATES:
- The Closing Disclosure must be received by the consumer at least three (3) days before closing may be scheduled:
- If the consumer receives the Closing Disclosure in person, closing may occur three (3) days later;
- If the consumer receives the Closing Disclosure by overnight delivery, closing could may four (4) days after lender has placed the Closing Disclosure with overnight courier;
- If the consumer receives the Closing Disclosure in the US mail, closing may occur six (6) days after lender has mailed the Closing Disclosure.
- If certain changes occur after the Closing Disclosure has been sent, it may trigger the requirement for a revised Closing Disclosure and another waiting period.
- Contrary to current practice, lenders and lenders attorneys will no longer be able to “squeeze in” last minute closings (even if your movers are scheduled).
- Buyer and Seller adjustments must be provided to lenders and their attorneys more than one week before closing – in all likelihood it will be 10 business days – or two weeks before closing in order to give the lender time to prepare and send the Closing Disclosure within the required time frames.
- The Closing Disclosure must be received by the consumer at least three (3) days before closing may be scheduled:
- Implementation of these new disclosures may cause closing delays – make sure you keep your plans flexible!
