Resources to Navigate the New Mortgage Rules
New mortgage rules roll out this Saturday and they’re expected to have sweeping changes on real estate closings.
Starting on Oct. 3, the TILA-RESPA Integrated Disclosure rule is to go into effect, which will merge the HUD-1 Settlement Statement, the Good Faith Estimate, and the Truth-in-Lending disclosure form into two new closing forms: a Loan Estimate and a Closing Disclosure.
The new rule also aims to provide consumers with more time to review the total costs of their mortgage prior to closing. The Loan Estimate form is due to consumers three days after they apply for a loan, while the Closing Disclosure form is due three days prior to closing.
The current HUD-1 settlement form can be revised and delivered up to the day of settlement, but the new mortgage forms must be finalized and in the borrower’s possession three days prior to closing. If that deadline is not met, borrowers will receive another re-issuance of the closing disclosure and wait another three days.
"As these new rules take effect, the hard work to deliver timely and efficient closings continues; extra time for closings and open lines of communication will be critical," Chris Polychron, president of the National Association of REALTORS® said in a statement today. "NAR will continue to communicate REALTORS®’ and their clients’ concerns to the CFPB and help ensure the new rules are carried out with as little disruption as possible to consumers and the industry. At the same time, Realtors® will continue providing expert service to their clients and playing a critical role in helping consumers everywhere achieve their buying, selling and investing objectives.”
Are you ready for the new rules?
Here is an overview of some resources to help you navigate these changes:
- Realtor.org’s Resource Page: An overview of the latest updates on the new closing rules.
- The real estate’s guide to “Know Before You Owe”: A toolkit produced by the Consumer Financial Protection Bureau, in cooperation with NAR, for real estate professionals that includes sections on how to have on-time closings, an overview of what has changed and the new loan documents, and the ability to share information with your clients about the new rules.
- What others are doing to prepare: Download the “REALTORS® and the New Closing Process,” a survey by the National Association of REALTORS® about the preparation of REALTORS® on the upcoming changes.
- Webcast: The New Closing Rules -- View an NAR webcast detailing what you can expect.
- Presentation materials from the Mortgage Bankers Association: Access a guide from the Mortgage Bankers Association that includes consumer and lender one-page overviews covering the new rules as well as a PowerPoint Slide Deck for real estate agents and brokers to use in their presentations with colleagues.
