It’s about to get harder to make last-minute changes before closing on your home. The Consumer Financial Protection Bureau (CFPB) recently opted to combine mortgage forms and disclosure documents into one packet that must be given to buyers and sellers much earlier in the process in order to give them time to review the deal and the terms of their loan in detail. Lenders will be required to provide clients with a “closing disclosure” (CD), which will replace the HUD-1 settlement statement, three days before closing, and making changes to that document during the remaining three days will almost certainly delay closing.
The rule is intended to prevent lenders from making last-minute adjustments to loan terms and hoping that homeowners will just agree in order to close. The change will take place on August 1, 2015, which is also the date that the CFPB will implement another change and combine the Good Faith Estimates disclosure and the Truth in Lending disclosure into the loan estimate (LE) form. Borrowers also much receive this document three days in advance, and lender’s final charges and loan fees must come within 10 percent of the estimates on the form.
While many real estate agents are not happy about these changes, the CFPB pointed out that it had planned to make “more dramatic changes to the settlement process, but heeded many of the warnings of the National Association of Realtors (NAR) and others.” Experts are recommending that everyone involved in a real estate transaction work to be ready for closing a full week in advance of the actual date in order to avoid losing access to low interest rates or tanking deals due to CFPB-related delays.
Are you happy about these changes? Will it affect your business in a meaningful way to have to have everything ready for closing a week in advance?
by Carole Ellis