Friday, November 22, 2013

New mortgage rules from CFPB

A lawyer recording documents this morning asked about the state of real estate.  I gave my standard reply these days: the market has been lethargic since August.  In discussing the prospects for improvement, the lawyer mentioned new rules for RESPA's and other things that are being developed by the Consumer Financial Protection as possibly causing some disruption when they go into effect sometime in the future.

The CFPB site always contains interesting information.  From what I can discern, these new rules are about improving disclosure to the consumer.  Here's some of what is said on the site:

The final rule contains new rules and forms for two disclosure forms consumers receive in the process of getting a mortgage loan: the Loan Estimate, which comes three business days after application, and the Closing Disclosure, which comes three business days before closing on the loan. These disclosures are required by the Truth in Lending Act and the Real Estate Settlement Procedures Act. The new forms integrate existing disclosures and implement some new disclosure requirements from the Dodd-Frank Act.

The rule also offers some more protections for consumers. For example, consumers must receive their Closing Disclosure three business days before closing on the loan so they have time to review it. The final rule also limits the circumstances in which consumers will have to pay more for settlement services than the estimate they received.

These disclosures and requirements will be effective August 1, 2015.

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