Ask us anything regarding buying and selling a home in Arizona and we can help you. Ask us about the new laws regarding the Dodd-Frank TILA-RESPA Integrated Disclosure Rule and we turn to Matt Baker, Loan Officer extraordinaire with HomeStreet Home Loans. Below are the comments from Mr. Baker regarding the changes that will go into effect on August 1st, 2015.
You have probably heard of the changes that are coming to mortgage loan disclosures as a result of the Dodd-Frank TILA-RESPA Integrated Disclosure rule. In a nutshell, these changes will simplify the disclosures required for borrowers by combining multiple overlapping documents into two disclosures:
1) The loan estimate – This new document will combine the Good Faith Estimate (GFE) and the Truth-in-Lending disclosure (initial TIL) and will be provided to consumers no later than the third business day after application. (This is the same as current timing.)
2) The Closing Disclosure – This form will combine the HUD-1 and final Truth-in-Lending disclosure (final TIL) and must be provided to consumers at least three business days before closing.
Although this new rule doesn’t go into effect until August 1, 2015, HomeStreet is taking a proactive approach by gearing up for the changes now. A comprehensive internal communication and training plan has been developed to ensure a smooth transition when the time comes.
The biggest shift, aside from the new forms, is the TIMING. The consummation of the new Closing Disclosure will need to occur three days before signing. So assuming the closing the following day it will require the Closing Disclosure to be signed on Monday for a Friday closing. The other change is that most lenders will be facilitating the Closing Disclosure, since the lender is required to document the receipt of the new document signed. Title and lenders will have to work closely to ensure no changes are made per the new rule. Very little changes will be allowed going forward, there are some exceptions, but I would prepare for 100% accuracy at time of the Closing Disclosure consummation to ensure a timely closing.
To begin the New 3-Day waiting period the Closing Disclosure must be signed and delivered in one of three ways. Note: HomeStreet will allow one (1) party who is signing the Note to consummate the document.
1) Hand delivered to processing.
2) Delivered by courier with signed receipt returned to processing.
3) Signed copy scanned and returned via email and forwarded to processing.
If the borrower takes no action they can sign loan papers after waiting six (6) business days (mailing time is assumed to be 3 days) from when the Closing Disclosure was mailed, or on day seven.
HomeStreet and the Bookspan Baker Team are taking a very proactive role in these coming changes, and we are here as a resource for additional questions.
So there you have it from Matt Baker with HomeStreet. Getting this right will mean that your moving truck won’t have to be parked in front of your new home while you wait for the time frames to pass racking up hundreds of dollars in truck rental fees. Or worse yet, the seller gets upset with the delay in closing and issues a Cure Notice giving you three-days to obtain the loan documents or they will move on to the next buyer. Who you choose to work with matters, so choose your lender and your REALTOR carefully.