Tag Archives: CFPB

With the New Closing Rules, are you Asking the Right Questions?

Posted on November 9, 2015 | Leave a comment

Pulling-hair-out-300x219As mid-November is upon us, everyone should be familiar with the new Closing Disclosure/TRID rules that apply to all closings requiring a mortgage where that mortgage was “signed” after October 3rd.

The first of these new closings will be taking place over the next few weeks. At the minimum, real estate agents on both sides of the transaction should know from the Buyer’s lender the following:

1. How many days prior to closing does the lender require the settlement services provider to give them all fees and invoices that will need to be on the Closing Disclosures and Settlement Statement?
2. How is the Buyer’s Closing Disclosure going to be delivered to the Buyer?
3. What day are they going to initiate delivery?

The answers to those three questions will tell you if the lender will be able to make the proposed closing date, and do so in accordance with the new rules.

Important note: most lenders will not automatically share the Buyer’s Closing Disclosure with the Buyer’s Agent, and will not allow the Settlement Services Provider to share a copy either.

Also, remember that the Seller will have their own Closing Disclosure that will be provided by the Settlement Services Provider, who will also produce the Settlement Statement – the only document of the three that authorizes closing and the distribution of funds.

All the documents use the same data, so in almost all cases, a change in one will cause a change in all. Depending on the processes at the individual lender in question, even simple changes may take days. There is almost no room to, “make it happen.” Even more than before, this is a lender driven process.

You can get a PDF of this Title Tip here.

Leave a comment

Posted in Title Tip of the Week

Tagged , , ,

New Closing Rules Top 10

Posted on October 2, 2015 | Leave a comment

CFPB1. The new Closing Disclosure ﴾AKA TRID﴿ rules apply only to closings involving a mortgage “signed” after October 3rd, 2015. Any deal with a mortgage “signed” prior to that date will be conducted under the prior rules and will use the 2010 HUD‐1. When in doubt, ask the buyer’s lender. That means that you won’t actually see the new rules’ impact at the closing table until late November.
2. The process for cash closings are not impacted except that, depending on your settlement service provider, the new American Land Title Association ﴾ALTA﴿ Settlement Statement may be used as the document to conduct the closing as opposed to the 2010 or 2007 HUD‐1 they used in the past for cash closings.
3. The driving force on when the closing will take place will be the lender.
4. The HUD‐1 will be replaced by at least three documents; the Buyer’s Closing Disclosure ﴾CD﴿, the Seller’s CD, and the ALTA Settlement Statement.
5. The Buyer’s CD and its delivery will be done in most cases by and will be the responsibility of the lender, not the settlement services provider. The settlement services provider will be responsible for the Seller’s CD and the ALTA Settlement Statement.
6. Buyers must have possession of their CD 3‐days prior the closing, i.e. if closing Thursday, must be in the buyer’s hands the Monday prior.
7. Most lenders will utilize the “mailbox rule” to allow three days for delivery of the CD prior to the 3‐days disclosure. That works out to it being “in the mail” one week prior to closing. That requires 10‐days prior for all costs to be in.
8. For planning purposes, the 10‐days outlined above for delivery of all invoices etc that need to be on the CD to the settlement services provider should be considered a minimum. Some major lenders are requiring costs to them 14‐days prior. That equates to 15‐days prior to closing for to your settlement services provider.
9. Some changes in the loan product may re‐trigger the 3‐day disclosure, but depending on the lender’s internal processes, even minor changes may take days to correct if they come after the “must deliver” date given by the lender. These can cause non‐waiverable delays in the closing date.
10. If you have not already, get trained in the details of the new closing process. Our final “just in time” training sessions at Watson Realty Corp.’s corporate training room are selling out. October 7th sold out in one day, and the session on the 14th only has 10 seats left. If you cannot receive training in person, you can also get an overview of the process via a series of training videos at Watson Title Services of N FL’s youtube page. Just head on over to youtube and search for our name, and it will take you right there.

For a PDF of this title tip, please click here.

Leave a comment

Posted in Settlement Services

Tagged ,

Are the Big Changes in the Closing Process Still Coming in August?

Posted on June 8, 2015 | Leave a comment

CFPBThe short answer is, “yes.”

The first week in June, the Consumer Financial Protection Bureau (CFPB) responded to a letter from Congress asking for a delay in implementation to the New Year of the new Rule due to take effect August 1st. This has received a lot of interest, so let’s look at it.

The “grace period” that Congress was looking for is not going to happen, but there was a compromise.

The Rule is still going in to effect on August 1st, so everyone still needs to be ready to go. What we have instead of a full-blown “grace period” is a declaration from the CFPB that there will be “sensitivities” towards good faith efforts by service providers to comply with the rule.

That should translate in to a more understanding enforcement framework for an unspecified period of time should there be some challenges by the various parties trying their best to be in compliance.

We may have a little breathing room from fear of full enforcement on day-1, but everyone still needs to make sure they are making every effort to stay in compliance.

What about Watson Title Services of N FL Inc.? We’re ready to go.

One bit of good news that came out last week? The clarification that not all changes in APR will retrigger the 3-day disclosure requirement. Only an increase in APR will.

We hope for more clarification in the next few months, and we’ll keep you up to speed as they emerge.

There will be a transition period as everyone becomes comfortable with the new rule, so the best thing you can do is to make sure you are ready, and we’re here to help you do just that.

Remember to keep an ear out for when I will be conducting training in your office or at Corporate over the summer on the new Closing Disclosure and some of the aspects of the Rule.

If you can’t make it to one of the open sessions at Corporate, go to YouTube and search for “Watson Title Services of N FL.” Click my face, and you’ll be able to see the entire series of training videos that will get you up to speed.

You can get the PDF of this Title Tip here.

Leave a comment

Posted in Title Tip of the Week

Tagged ,

Understanding Page-2 of the August 2015 Closing Disclosure

Posted on April 3, 2015 | Leave a comment

The second of the series of videos explaining the new Closing Disclosure.

Leave a comment

Posted in Title Tip of the Week

Tagged ,

Understanding Page-1 of the August 2015 Closing Disclosure

Posted on March 17, 2015 | Leave a comment

Here is the first of a series of training videos that will walk you page-by-page through the upcoming August 2015 Closing Disclosure.

Leave a comment

Posted in Mortgages, Settlement Services, Title Tip of the Week

Tagged ,

Getting to Know the New August ’15 Closing Disclosure: Part I

Posted on September 26, 2014 | Leave a comment

paper-files-stack-of-papers-surprisedAs we first outlined to you last November, big changes are coming up in the Summer of 2015 on how your closings are going to take place, how the settlement statements will be delivered, and the new forms to be used by mortgage and settlement service providers starting on August 1st, 2015.

You may have noticed in the title that this is “Part I.” Between now and August 2015, we will publish every month another part of the series using our weekly Title Tip. Each serial will address a different change coming up. Our goal is that with this series along with the dedicated training we will provide next year as August approaches, you will have a seamless transition from HUD‐1 to Closing Disclosure. Let not your heart be troubled – we will be with you the entire way.

What do you need to know now about the changes? Well, first of all, you need to know they are coming next year. Second, know that we will make sure that every one of our customers – you – will have multiple opportunities to be trained on, understand, and have the tools you need to explain the new process and its settlement statement to your customers next Summer.

You will hear more and more of people in the industry using new terminology and definitions. Everyone will need to get comfortable with these, as they are what the Consumer Financial Protection Bureau ﴾CFPB﴿ will be using – and will expect everyone else to use. As words and their use are critical in understanding everything that follows, that is what we will focus on for this week’s Title Tip.

Here are the top‐six changes in terminology you will start to see:

‐ Old: HUD‐1. New: Closing Disclosure.
‐ Old: TILA & GFE. New: Loan Estimate.
‐ Old: Lender. New: Creditor.
‐ Old: Borrower. New: Consumer.
‐ Old: Tolerance. New: Variance.
‐ Old: Closing/Settlement. New: Consummation.

There has been some pushback on the term “consummation” for closing, but the CFPB insists on its use.

My expectation however, is that regardless of what the CFPB desires; the use of “closing” will most likely remain in use in the field.

I know many of you keep hard copies of our Title Tips, and if you don’t you may want to start. Make a section dedicated to the August 2015 Closing Disclosure series, and keep them together as new tips in the series come out so you have a handy reference.

In the meantime, if you hear any rumors or have questions, feel free to give me a call or send me an email.

You can get a PDF of this title tip here.

Leave a comment

Posted in Settlement Services, Title Tip of the Week

Tagged

The “New HUD-1”

Posted on November 22, 2013 | Leave a comment

change-aheadIt 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.

Leave a comment

Posted in Mortgages, Title Tip of the Week

Tagged ,