The Revisions Have Begun

You may have missed the announcement as I am not sure there was one.  I am subscribed to CFPB announcements and emails and did not receive any notice of this rule change.  Two days ago (Tuesday, 01.20.2015) the Consumer Finance Protection Bureau ("CFPB") finalized two minor changes to the TILA-RESPA Integrated Disclosure forms.  The official announcement on the CFPB website is HERE.

The changes were made in response to pressure from the mortgage industry.  The first rule change addresses the timing of the required, revised Loan Estimate at the time of a rate lock on an adjustable rate loan.  The second change is an actual change to the form that accommodates the fact that a construction loan for the construction of a new residential dwelling may take a longer period to consumate. The revised form will include a statement for construction loan indicating that the borrower may receive a revised Loan Estimate because of changed costs and charges associated with the construction loan.  The Loan Estimate form takes the place of the existing Good Faith Estimates and preliminary TILA disclosures.

Previously, the rule which is included in Regulation Z, 12 CFR Section 1026.19 (e)(3)(iv)(D), previously indicated that a revised Loan Estimate was to be delivered to the borrower on the date that the interest rate was locked on an adjustable rate loan.  The revised rule will allow a lender a period of three days after a rate lock within which the revised Loan estimate can be delivered to the borrower.  Some lenders had expressed concern that they could receive a call from a borrower late in the day to lock in an interest rate and that the lender would nbot be able to make the revised discvlosures in a timely fashion as oral rate locks were being recognized by CFPB.

This may be the first of a long list of changes that CFPB may make to its new disclosure forms.  A previous post, "Title Insurance Association Expresses Concern", outlined a change that the American Land Title Association feels must be made to the form to accommodate the proper disclosure of title insurance premiums and discounts.  One thing that has not changed is the fact that these new forms must be used for loans closing on or after August 1, 2015.  Will you be ready?