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CFBP Rules: A Detailed Look at the Replacement of Consumer Disclosure Forms

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By Zoe Eisenberg

The downside? According to Trepeta, a lot of complexity remains, and the rule appears costly to implement. There is also a concern that by making lenders responsible for all the settlement documents, cost and confusion will be added for consumers.

Below are more detailed bullet points regarding the rule, issued by Stewart Title.

• The creditor is responsible for the delivery of the Closing Disclosure, but may use settlement agents to provide it. Direct from the CFPB: “Final rule acknowledges settlement agents’ longstanding involvement in the closing of real estate and mortgage loan transactions, as well as their preparation and delivery of the HUD-1. The final rule avoids creating uncertainty regarding the role of settlement agents and also leaves sufficient flexibility for creditors and settlement agents to arrive at the most efficient means of preparation and delivery of the Closing Disclosure to consumers.”

• The Closing Disclosure must be received by the borrower at least three business days before closing the loan.

• Changes to the Closing Disclosure at closing are permitted without another three-business-day waiting period, EXCEPT if the creditor changes the APR above one-eighth of 1 percent for most loans, changes the loan product, or adds a prepayment penalty to the loan.

• Both the Loan Estimate and Closing Disclosure include the word “optional” after Owner’s Title Policy.

• The final rule will apply to most closed-end consumer mortgage loans; it will not apply to home equity lines of credit (HELOCs), reverse mortgages, or mortgages secured by mobile home.

• The final rule will be effective for all mortgage applications received by the creditor on or after August 1, 2015.

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