Oh no!!! the Final Integrated Mortgage Disclosures Rule from the Consumer
Financial Protection Bureau (CFPB) is here. Don't worry it's not going to be the final "final" some senator is going to make up new procedures that make little sense. Now the CFPB lights a little gasoline on your desire to close quickly, sorry this tastes bad but its for your own good. How many times do borrowers avoid reading Truth
in Lending and Good Faith Estimates? In a transaction I send them more than once, now we will be sending again at closing. Welcome to the new improved Act and the Real Estate Settlement Procedures Act.
The most important change is the mandate of the use of two new documents: the
LOAN ESTIMATE and CLOSING DISCLOSURE.
- Except
for reverse mortgages, clients will no longer receive an initial
Truth in Lending (TIL) form and Good Faith Estimate (GFE), or a final TIL
form and HUD-1 Settlement Statement (HUD-1). This is not a good thing.
- The initial TIL and GFE will be replaced with the Loan Estimate, which must be provided within 3 business days of loan application. (Business days will include Saturdays if the lender is open to the public and carrying on substantially all of its business functions.) A New name for TIL and GFE fails at being helpful to Borrowers - here is why: escrow and states with attorneys are often Mostly frequently wrong about their costs upfront.
- The
final TIL and HUD-1 will be replaced with the Closing Disclosure, which
must be provided at least 3 business days prior to loan closing. This
means borrowers cannot close on their loan until at least 3 business days
after receiving the Closing Disclosure. (Business days will include all
calendar days except Sundays and certain enumerated legal holidays.)
- These
documents go into effect for loans on which a loan application is taken on
or after August
1, 2015.
The initial TIL, GFE,
final TIL and HUD-1 will continue to be a part of the closing process for
reverse mortgages and for transactions on which an application was taken before
August 1, 2015.
I planted some nice succulents in these old metal gas cans in memory of the old procedures. If you want one as a closing gift, just ask.