Beaufort County Association of REALTORS® (BCAR) wants you to be aware of the new Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) changes which will take effect August 1, 2015. The changes will significantly change the closing process.
On November 20, 2013, the Consumer Financial Protection Bureau (CFPB) issued its final rule to integrate RESPA and TILA disclosures and regulations. The final rule integrates existing disclosures with new requirements from the Dodd-Frank Act to improve consumer understanding of the mortgage process, aid in comparison shopping and help to prevent
zsurprises at the closing table.
Highlights of the new rule include:
• A new loan estimate document which replaces the Good Faith Estimate and the initial Truth in Lending disclosure.
• A new closing disclosure document which replaces and combines the HUD-1 and final Truth in Lending disclosures.
• Loan Estimates must now be given to consumers within 3 business days of applying for the loan.
• Types of loans covered include most closed-end consumer mortgage loans. The rule does not apply to home equity lines of credit, reverse mortgages, mortgages secured by mobile homes or by dwellings not attached to the property and creditors who make five or fewer mortgage loans in one year.
BCAR suggests those who intend to buy or sell real estate after July should contact their law firm as soon as possible to discuss how the new federal laws, closing procedures and documents could potentially cause closing delays.
“It’s extremely important that Realtors® and consumers understand these new procedures so that there are no surprises at the closing table,” said Janet Gresham, CEO of the Beaufort County Association of REALTORS®.