The Consumer Financial Protection Bureau (CFPB) will be requiring the use of the “Closing Disclosure” starting August 1st 2015. This replaces the current HUD-1 closing statement.
The form shown in this pdf might change before 8/1, but this is probably close to what it will look like.
http://files.consumerfinance.gov/f/201311_cfpb_kbyo_closing-disclosure.pdf
There are a few things I like about this, and probably a few things I won't like.
Likes- (1). I think it wil be easier for the average buyer to understand more about the closing process.
(2). On page 4 under " Loan Disclosures" , It clearly states whether or not a loan is assumable. And it also states under "Partial Payments" that your lender will or will not accept partial payments and apply them to your loan. ( I would assume that a partial payment will be considered a late payment)? (3) Under " Other Disclosures" on 5th page, " Liability after Foreclosure" - " state law may protect you from liability for unpaid balance. If you refinance or take on any additional debt on this property, you may lose this protection and have to pay any debt remaining even after foreclosure. You may want to consult a lawyer for more information."
That last line can be interpreted many ways. Will that cause buyers to think twice about refinancing or taking out a HELOC to remodel or improve the property?
The other item on pg 3 of 5 is under " Summaries of Transaction" Line 02 " Sale Price of Any Personal Property Included in Sale". In this area, many people buy Kubota tractors and other equipment to maintain the many 10+ acre lots we have in Loudoun. Those tractors can cost $10,000.00 to $20,000.00 +. Then if some furniture is added in that won't fit in sellers new home, let's say buyer pays $4000.00 for furniture. Ok, I'll stop there for this example. That's $24,000.00 for personal property. It shows on the Closing Disclosure, only people involved in the buying and selling of that property will see it.
Now suppose you are doing a CMA on a similar property nearby. In the MLS it shows this sale at $324,000.00. But you have know way of knowing $24,000.00 of that sale was personal property. The real estate was really only valued at $300,000.00. How will that affect how you do a CMA? Will the listing agent deduct that $24,000.00 from the sale price when he/she enters it into the MLS? I'm not sure yet how that will work?
Jeff Pearl | Lic in VA
Remax Distinctive | McLean VA
703-727-4876
Homes | Land | Farms | Historic
Equal Housing
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