On November 20th, the Consumer Financial Protection Bureau (CFPB) issued a final rule regarding the integrated RESPA and TILA disclosures. The final rule is effective for applications received by a mortgage broker or lender on or after August 1, 2015 and applies to most closed-end consumer loans.
The final rule provides for two new disclosures: (1) the Loan Estimate, which replaces the Good Faith Estimate and early TILA disclosure; and (2) the Closing Disclosure, which replaces the HUD-1 and TILA disclosure. The Loan Estimate must be provided no later than three business days after receipt of an application. For purposes of the Loan Estimate, “application” means the applicant’s name, income, social security number, property address, estimated value of property, and mortgage loan amount sought.
The Closing Disclosure must be received by the borrower three business days before closing. Unlike the proposal, the final rule provides that re-disclosure along with a new three business day waiting period applies only if the APR increases by more than 1/8th of 1%, the loan product changes, or a prepayment penalty is added. Other changes can be disclosed on a revised Closing Disclosure without delaying closing. The final rule also allows settlement agents to provide the Closing Disclosure.