Three Things to Prepare Now for New Mortgage Disclosures
|July 9, 2013|
It’s been several months since the comment period to the Consumer Financial Protection Bureau’s proposed rule to integrate mortgage disclosures required under the Real Estate Settlement Procedures Act and the Truth In Lending Act.
The Bureau has proposed a new Loan Estimate and Closing Disclosure that will replace the current Truth in Lending (TIL), Good Faith Estimate (GFE) and HUD-1 Settlement Statement.
The industry is now in a waiting period before the CFPB issues its final rule, which is expected to happen sometime between September and December 2013. In the meantime, there are several things can title professionals do now to prepare, according to Leslie Wyatt, director of industry relations for SoftPro.
Wyatt said this is the perfect time to start thinking about how to best plan for the upcoming changes.
“Based on the proposed rule, you may be looking at various workflow changes,” Wyatt said. “Look at your internal processes and see what may need to change and how best to implement those changes. You should be as proactive as possible to alleviate scrambling later to try and get things in place.”
Wyatt said that it’s not likely much will change from the proposed rule to when the CFPB issues its final rule. Title professionals should start training and educating staff on the proposed regulations and guidelines, as well as the proposed Closing Disclosure. As an aid, starting on page 839 of the 1,099-page rule, the CFPB provides examples of how to fill out the Closing Disclosure for different loan products.
“You can divide your training plan into two parts: the proposed rule and the closing disclosure forms,” Wyatt said. “Helping your employees understand the new regulations now will only make the transition that much easier when the final rule is published.”
Currently, settlement agents are required to provide the HUD-1, while lenders are required to provide the revised Truth-in-Lending disclosure. The CFPB is proposing two alternatives for who is required to provide consumers with the new Closing Disclosure form: