CFPB Releases Second Round of Draft Settlement Disclosure Form
|December 15, 2011|
The Consumer Financial Protection Bureau released its second round of alternative prototypes of a settlement disclosure form to be used during closing to replace the current HUD-1 and Truth in Lending disclosure.
The Bureau is seeking comments through Dec. 21. It is important ALTA members inform the Bureau how these draft forms of a new HUD-1 will affect closings and your business. Go to the CFPB’s Know Before You Owe webpage to leave comments. Make sure to switch to the “Industry Tool.”
Last month, the CFPB tested two prototypes for a disclosure of final loan terms and closing costs. They were both similar. This time around, the CFPB created a different format for this information. In the latest prototypes, the CFPB are testing a design that displays final closing costs in a format similar to the prototype it has tested for the application disclosures. In this round, the CFPB released two, five-page drafts called Mimosa and Sassafras.
“We’re wondering if this design will make the disclosure even clearer and easier for consumers,” the CFPB said. “Our goal this time around is to find out which is better for disclosing closing costs: a design that mirrors the disclosure people receive when they apply for a mortgage, or one that is similar to the current HUD-1 settlement statement.” The Dodd-Frank Act requires the CFPB to integrate the two disclosures homebuyers currently receive when closing on a mortgage loan: the HUD-1 Settlement Statement and final Truth-In-Lending disclosure. The Bureau’s goal is to make this one combined form easier for both consumers and industry to understand and use. When reviewing the forms, the CFPB wants you to ask: