New Loan Disclosures and Settlement Statement

By Todd Abelson NMLS #180858 on .

CFPB-LogoAs part of its continuing overhaul of residential mortgage rules, the Consumer Financial Protection Bureau (CFPB) is replacing the long standing HUD-1 Settlement Statement with a new Closing Disclosure. The new version, which goes into effect on August 1, 2015, is designed to provide disclosures to help consumers better understand all of the costs associated with their transaction. A sample of this document, to be provided to consumers three business days before they close on their mortgage loan, is particularly helpful in understanding what the Closing Disclosure will look like upon completion.

Additionally on August 1, 2015, the current Good Faith Estimate and Truth in Lending Disclosures will be replaced by a new Loan Estimate. This form, which will be provided to consumers within three days after they submit a mortgage loan application, is designed to provide disclosures that will help borrowers understand the key features, costs and risks of the mortgage loan for which they are applying. Click to see a sample of the PURCHASE version or the REFINANCE version. Click to see a COMPARISON of the existing forms vs. the forms that will take effect on August 1, 2015.

One of the more helpful & concise guides which is easy to understand is titled Final Rule on Simplified and Improved Mortgage Disclosures, can be found HERE. This 7-page guide, issued on November 20, 2013, provides a broad overview of the upcoming changes. A more detailed guide is the bureau’s TILA-RESPA Integrated Disclosure Rule Small Entity Compliance Guide found HERE (although more recent, it’s 91 pages long and addresses detailed and complex topics! Not for the faint-of-heart).

Call Todd Abelson at Sunstreet Mortgage, LLC (520) 331-LEND (5363) for all your mortgage needs!