Law Office of
Erin Spiess Chang LLC
Real Estate News
Important Information
Basics of the TILA-RESPA Integrated Disclosure Rule
For over 30 years Federal law has required lenders to provide disclosure forms to consumers applying for mortgage loans.
Lenders are required to issue a Loan Estimate to an individual upon the applicant's applying for a loan. Three days prior to closing the lender must issue a Closing Disclosure to the consumer with final loan terms. These documents have undergone several amendments since inception all with the goal of better disclosing mortgage loan terms to consumers.
As we reached the ten year milestone of using the Loan Estimate and the Closing Disclosure forms we can expect that there will continue to be revisions to the documents in future, but overall the documents have served consumers well in their first ten years.
Impact on Real Estate Closings
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Given the mandatory three day review period from delivery of the Closing Disclosure to the consumer a closing may now take longer. Click here for a look at a Loan Estimate Delivery Calendar Example.
The Closing Disclosure replaced the HUD-1 Settlement Statement and the TIL Disclosure. All contact information, including license numbers must appear on the Closing Disclosure.
The Loan Estimate replaced the Good Faith Estimate. Lenders are required to furnish the Loan Estimate to mortgage applicants within 3 days of application.
Clients may receive multiple Closing Disclosures due to changed circumstances that trigger a 3 day waiting period.
Real Estate Agents
As the point of contact for most real estate transactions, real estate professionals will be affected by a number of rules and regulations put forth by the Consumer Financial Protection Bureau (CFPB).
You will need to be able to talk your clients through the new forms resulting from the proposed mortgage disclosure rule, which will also affect the timing of your closing transaction with a mandatory three-day notification for both the Loan Estimate and the Closing Disclosure.
Now more than ever you'll need to work hand in hand with real estate professionals you trust. So learn as much as you can about the new rules and prepare for the changes in the transaction process ahead of time. For more information on what you can do to prepare click here.