More Good News about Simpler Closings
In my last blog, I discussed tips to make closing day a lot less stressful. And here’s some more good news: According to credit.com, the Consumer Financial Protection Bureau (CFPB) is in the process of making changes that will reduce frustration over hard-to-understand paperwork and simplify the closing process.
By August 2015, lenders will be required to give buyers more time – at least three business days -- to review closing documents before having to sign them. In addition to providing more time for questions and cost comparisons, the CFPB is also attempting to make closing disclosure documents easier to understand so that the information that matters most is the main focus. For example, on the new forms, interest rate, monthly payments, and total closing costs will be clearly highlighted on the first page. The form will also provide more information about tax and insurance costs and how interest rates and payments could change in the future. It will also warn consumers about things they might want to avoid, such as penalties for paying off a loan early.
Nor will lenders be able to make changes in closing documents at the last minute. Under new compliance laws, all the paperwork presented to the consumer at final closing will be paperwork that the consumer has already seen.
Additionally, the CFPB is initiating an “eClosing” pilot program that will electronically provide information regarding mortgage closings, giving consumers even more time to review documents and spot errors ahead of time.
For an in-depth look at the closing procedures that will take place by next August, visit http://files.consumerfinance.gov/f/201311_cfpb_tila-respa_what-it-means-for-consumers.pdf
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