On August 1, 2015, the mortgage industry will introduce two new loan disclosures. The Loan Estimate and the Closing Disclosure will be utilized on most applications taken after the effective date. These changes will be implemented by the Consumer Financial Protection Bureau (CFPB) under the CFPB’s rule making authority pursuant to the Dodd Frank Wall Street Reform and Consumer Protection Act.
What do the changes mean?
Good Bye to the 2010 Disclosures
The Good Faith Estimate (GFE) and the Truth in Lending (TIL) disclosures will now be combined into the Loan Estimate for most transactions. Certain loans such as HELOC’s and reverse mortgage will still utilize the current disclosures. In addition the Closing Disclosure will replace the HUD-1, GFE, and TIL disclosures provided at settlement and must be delivered to the consumer three (3) business days prior to consummation.
The 1,888 pages of regulation that mandates the new disclosures and delivery requirements will not only impact lenders, but also other industry professionals. Because the rule expressly holds lenders liable for the accuracy and delivery of the Closing Disclosure, settlement agents companies and realtors must work closely to deliver all of the information necessary to ensure settlement is not delayed as a result of the three (3) business day delivery requirement.
NFM Lending is preparing for these changes and is constantly training our loan originators, realtors, settlement agents, and other industry partners to be up to date on this important industry change.