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New Mortgage Rules and Disclosures | CFPB

The CFPB (Consumer Financial Protection Bureau) new rules took effect Aug.1, 2015 apply to almost all residential real estate transactions involving a mortgage or coop loan. 

“Know Before You Owe” Mortgage Disclosures, Replacing Truth in Lending, Good Faith Estimate, and HUD-1 Settlement Statement

Borrowers will receive two forms now:
The Loan Estimate soon after loan application and The Closing Disclosure three business days before closing.

The CFPB believes that borrows are better served if they have time to review the Closing Disclosure before signing the loan documents. The rule requires that borrowers have three business days after receipt of the Closing Disclosure to review the form. If the form is mailed, it is deemed received three business days after it was mailed. Be prepared for closing delays.

The CFPB requires that the Closing Disclosure show the full amount of the title insurance premium for a loan policy as if it were written as a stand-alone policy and not simultaneously with an owner's policy.

The Closing Disclosure replacing the HUD-1 Settlement Statement, will have seven areas of charges: origination charges, services borrower did not shop for, services borrower did shop for, taxes and other government fees, pre-paids, initial escrow payment at closing and other. 

The borrower might receive more than one Closing Disclosure. Since the borrower is likely to receive the Closing Disclosure before the walk-through, borrowers may receive a new, adjusted Closing Disclosure at closing showing any changes that occurred during the time between the initial disclosure and the closing, including adjustments due to the timing of the closing and other matters. 

If there are changes to financial matters such as changes to the APR above 1/8th% for most loans, changes to the loan product, or the addition of a prepayment penalty, the lender will have to re-disclose and the timing periods will start again and closing will be delayed. 

The preparation and delivery of the Closing Disclosure can be made either by the lender or the settlement agent. At this time it appears that most lenders will handle it. Seller's attorney 
can prepare a separate seller’s Closing Disclosure with seller’s figures only.

Summary of new rules and disclosures here

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