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The Dodd-Frank Act required the Consumer Financial Protection Bureau (CFPB) to integrate certain mortgage loan disclosures which are currently required under The Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). The changes are designed to make the disclosures more clear and concise. All lenders on certain consumer loans are required to disclose items in a consistent manner.

The TILA-RESPA Integrated Disclosure Rule (TRID Rule) requires significant changes to the disclosure forms that all lenders provide to consumers applying for a closed-end loan secured by real estate. A consumer loan is a loan that is made primarily (that is, more than 50%) for family, household or personal purposes. Such purposes include buying a new residence, buying a new family car, paying medical bills or paying education expenses. A closed-end loan is one that does not have a revolving feature so a consumer does not have access to principal that is repaid.

All lenders must comply with the TRID Rule with applications for closed-end consumer loans secured by real estate that are taken on or after October 3, 2015. For loan applications that were taken before October 3, 2015, the lender must continue to use the current disclosure forms even if the loan is closed on or after October 3, 2015.

The following table is a comparison of current disclosure rules and the revised disclosure rules.



















Before October 3,2015On or After October 3, 2015


  • At the time of application, consumers receive a disclosure booklet titled - “Shopping for Your Home Loan: Settlement Cost Booklet.”




  • Within 3 business days of application, consumers receive a disclosure booklet titled - “Your Home Loan Toolkit: A Step-by-Step Guide.”




  • Within 3 business days of application, consumers receive an initial TIL disclosure statement (TIL) and a Good Faith Estimate form (GFE).




  • Consumers receive an initial disclosure document called the Loan Estimate form (LE).

  • The initial TIL disclosure statement and GFE will be replaced by the LE.

  • The lender must provide the LE within 3 business days of the application.

  • Fee changes based on valid changed circumstances will be re-disclosed on a revised LE.

  • After the consumer receives the initial LE, FCS Financial must obtain the consumer’s Intent to Proceed to confirm an intent to proceed with the application, prior to imposing any fees (other than a credit report fee).




  • At closing, consumers receive a final TIL and a HUD-1 Settlement Statement (HUD-1).




  • Consumers receive a new document called the Closing Disclosure (CD).

  • The CD replaces the final TIL and HUD-1.

  • Consumers must receive the CD no later than 3 business days before the loan closing.

  • If certain information on the CD is changed, the lender must provide a revised CD to the consumers. In some circumstances, the 3-day waiting period must be restarted.



 

Resources

A copy of the new Home Loan Toolkit booklet can be found at this location:
http://files.consumerfinance.gov/f/201503_cfpb_your-home-loan-toolkit-web.pdf

A copy of the new Loan Estimate form can be found at this location:
http://files.consumerfinance.gov/f/201403_cfpb_loan-estimate_fixed-rate-loan-sample-H24B.pdf

A copy of the new Closing Disclosure form can be found at this location:
http://files.consumerfinance.gov/f/201403_cfpb_closing-disclosure_cover-H25B.pdf

You may have questions about the new forms and how they can affect the dates for your loan closing. FCS Financial has trained its staff on the new forms and can assist with answering your questions.

The timing requirements for the new disclosures may affect the ability to change closing dates at the last minute. If you are signing a contract to purchase a property, please be sure to allow sufficient time in the contract for the closing of the purchase. Because of the new disclosure timing requirements, it may no longer be possible to close transactions within thirty days of signing a purchase contract.
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