Posted on March 19, 2015 - 03:50 PM
by Paul Brenot
WASHINGTON – March 16, 2015 – The Consumer Financial Protection Bureau (CFPB) has major mortgage changes scheduled to take place Aug. 1. While the new rules directly impact lenders and title companies, they will also change the flow of many real estate transactions.
One of the biggest changes with an impact on Realtors is a requirement that lenders use the new TILA-RESPA Integrated Disclosure form beginning Aug. 1, 2015.
So far, not even all lenders understand the rules. Of 1,743 settlement agents recently polled about their preparations, 92 percent knew about the new rules, but just 36 percent were familiar with the updated document.
Under the rule, consumers must be given the new closing disclosure three days before closing. The three-day requirement is locked in stone, so if a change must be made, that change resets the three-day requirement, potentially postponing a scheduled closing.
"It's no longer (the case) where you can change a closing number or a settlement number the day before the loan closes," says HomeBridge Financial Services CEO Peter Norden, speaking at the 32nd Annual Regional Conference of MBAs in Atlantic City. "That is a major game change for every Realtor, every mortgage broker, every closer."
All of the responsibilities associated with new disclosure rules rest with lenders that must inform parties to the closing of the changes. It takes control away from title insurers and closing agents, according to Freedom Mortgage President and CEO Stanley Middleman.
"The reality is that this is going to be expensive and cumbersome, and it's going to be difficult," Middleman says. "Companies need to dedicate tens of thousands of man hours to prepare for this, because as an industry, I'm still not certain we are prepared."
Source: Mortgage Professional America (03/15) Norvell, Rachel