It has begun! In case you haven’t heard, the October third deadline for compliance with the TILA-RESPA (The Truth in Lending Act (TILA) of 1968; The Real Estate Settlement Procedures Act (RESPA), a consumer protection statute first passed in 1974) Integrated Disclosure Rule implementation is underway. The Consumers Financial Protection Bureau (CFPB) has initiated mortgage initiatives designed to help you, the consumer of home ownership, understand your loan options better, give you time to review loan documents, and in essence protect you from costly surprises at the closing table.
Basically, the mortgage disclosure rule replaces four disclosure forms with two new ones; the Loan Estimate and the Closing Disclosure. These disclosures are forms that you get when you work with a lender to get a mortgage. The new forms are designed to be easier to read, and to understand the terms of your mortgage before accepting them. The rule also requires that you get three business days to review your Closing Disclosure and ask questions before you close on a mortgage, or delays in the closing process will be triggered.
So, what does this mean for you the consumer? Perhaps nothing more than some additional time needed when securing certain loans in order to purchase a home – at least for the next several months while the process becomes the new routine. With tighter lending guidelines and new disclosures, it will be imperative for you to quickly meet the deadlines for those documents your financial institution requires to process a loan. Certain circumstance may trigger delays, so it is imperative to be organized and provided documentation early. It will also likely mean you will need a more communicative and streamline approach in selecting your real estate “team” – your real estate professional, your lender, and your closing attorney or settlement company – when purchasing a home.
As always, to better understand these most recent changes to your home-buying process, start with your most trusted real estate professional, or call us for more detailed information.