HUD-1 Settlement Statement Changes
In July of 2012 the Consumer Financial Protection Bureau announced their proposed revisions to the GFE, TIL and HUD-1, in order to redesign settlement documents to be easier for consumers to understand. After nearly 18 months of soliciting industry feedback and deliberating a wide range of opinions, the CFPB has published the TILA/RESPA Integrated Closing Disclosure Rule.
Below are some interesting highlights of the Integrated Closing Disclosure Rule:
- The CFPB acknowledges that consumers can save money if they shop around for their own service providers for title and settlement services.
The Loan Estimate Form replaces the early Truth-In-Lending statement and the Good Faith Estimate. It must be provided to consumers within three (3) business days after they submit a loan application.
The Closing Disclosure Form replaces the final Truth-In-Lending statement and the HUD-1 Settlement Statement. Consumers must receive this form three (3) business days before closing on a loan.
- This rule will be in effect starting August 1, 2015, and all impacted loans originating after this date will require the new mortgage disclosures.
- Events such as significant changes to APR, changes in the loan product, or the addition of a prepayment penalty would justify a 3 day retrigger.
- Saturday would count as a business day only if the lender is open for business on Saturdays.
- Title and settlement fees are excluded from the APR calculation.
- Lenders are permitted to work with settlement agents to prepare and deliver the new Closing Disclosure Form.
- Both of the new disclosure forms will be available in English and Spanish versions.
To help you understand how these changes may impact you, please contact Sergio & Jan Hernandez and put their real estate knowledge and expertise to work for you