It is never too early to see what is coming next in settlement services, so bookmark this Title Tip, as you will probably have reasons to refer to it a few times over the next two years.
Most everyone is aware that a replacement to the “2010 HUD” has been in the works over the last year. Those who have been in the business for awhile remember some of the challenges when the 2010 HUD came around. There are challenges in any transition, but we are going to do our best to make sure that all our customers are informed and ready for the transition.
First things first: we have plenty of time to understand, conduct training, and implement the changes coming with the settlement statement. Housing and Urban Development’s replacement organization, the Consumer Financial Protection Bureau (CFPB), has announced that the new “Loan Estimate Form” and “Closing Disclosure Form” that will replace the Truth in Lending (TIL) and the HUD-1 will have an implementation date of August 1, 2015. That gives us 22 months to get ready.
As August 2015 approaches, there may be some small adjustments to the forms and procedures, but we should expect the timeline to remain the same. One thing we will be doing as the implementation date approaches is to provide our customers, you, multiple opportunities to receive training on the “New HUD” – or as we should get used to saying over the next year and a half or so, the “Closing Disclosure Form.” Too bad “CDF” doesn’t roll off the tongue like “HUD” – but that’s OK.
More good news is that a lot of the preliminary concerns with the Closing Disclosure Form are no longer in play. Now would be a good opportunity to put them to rest.
– There is no mandate that the lender prepare and deliver the new Closing Disclosure Form on their own. Lenders are allowed to work with settlement agents on this process, just like they do now.
– The triggers that would require a mandatory 3-day waiting period for delivery of the final Closing Disclosure Form if any changes are made prior to closing have been moderated. A 3-day retrigger would only occur in the event of: significant changes to APR, changes in the loan product, or the addition of a prepayment penalty. The 3-day period remains, but minor changes in numbers before closing can be made without a retrigger.
The new Loan Estimate Form and Closing Disclosure Form will be available in English and Spanish versions. If you want to get a peek at them click hyper links above.
The General Fact Sheet from CFPB can be found here, and if you’d like a PDF of this week’s Title Tip, you can download it here.
My Agent Greg 