By now, most agents have heard about the changes that will come into play effective October 3rd thanks to the Consumer Financial Protection Bureau's new TILA-RESPA Integrated Disclosure Rule. The rule is a result of the Dodd-Frank Wall Street Reform Act which is suppose to improve the way consumers receive information about mortgage loans and the fees associated with purchasing a home.
The new TILA-RESPA Integrated Disclosure Rule requires the use of two new disclosures, (1) the " Loan Estimate" replaces the "Good Faith Estimate" and the initial " Truth in Lending Disclosure", and the new "Closing Disclosure" which will replace the old "HUD-1" that we have been using for several years, and the final " Truth in Lending Disclosure".
How will this affect real estate contracts and sales? (1) I think mainly it will require more explaining and educating by loan officers and agents. (2) I think more time will be need to be allowed from contract to closing. I'm guessing 45 days will become normal, especially in the beginning. As everyone becomes familiar with these new changes, I suspect some closings could happen closer to 30 days depending on how busy everyone involved in the process is.
Looks like it's time to start signing up for classes that explain these new forms and changes.
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Jeff Pearl | Lic in VA
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