The Consumer Financial Protection Bureau (CFPB) enacted the TILA-RESPA Rule (Rule), effective October 3, 2015, that consolidates four existing required disclosures on all closed-end credit transactions secured by real property, which includes nearly all real estate transactions. The new Rule was designed to further protect consumers and provide more clarity than the existing Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act of 1974 (RESPA) disclosures. The Rule integrates existing mandates into 2 new forms (the Loan Estimate and the Closing Disclosure) and details how these documents should be completed, establishes timelines for filing and outlines what changes to these forms are considered material and require amendments and/or additional disclosures.
What this Means
Simply put, this new Rule changes the required disclosure forms for real estate transactions. It imposes new deadlines that require completed documentation and filed in a timelier manner on the front end, and finalized well in advance on the back end prior to closing.
How Does this Affect Real Estate Professionals?
The new TILA-RESPA Rule requires lenders to provide your clients with completed disclosures 3 business days prior to getting to the closing table. If there are material changes made to the loan during this 3 day period, then a new three business day review period will be required.Non-material changes leading up to closing that do not alter the basic terms of the deal will not require this extra three-day review, but will require that the lender provide an updated Closing Disclosure.
Changes Requiring NEW 3 Day Review
Changes NOT Requiring NEW 3 Day Review
•APR increase of more than 1/8 of a percent for fixed loans, or 1/4 of a percent for adjustable loans •Addition of a prepayment penalty •Loan product changes
•Unexpected discoveries on walk-throughs•Most changes to payments made at closing•Typos found at the closing table
Author:Tim Walsh Phone: 703-447-2236 Dated: September 22nd 2015 Views: 214 About Tim: I work full time in Real Estate. We created Your New Home Team to focus our energies in creating smo...
About REMAX PREMIER - Your Best Source for Home Listings in Northern VA
NorthernVAHomesForSale.net We are a new and growing team of professionals with one goal in mind - to be the #1 trusted advisor(s), confidant(s) when it comes to buying, selling, building or investing in Northern VA for our clients and community. Our unique backgrounds, dedication, experience and commitment pours into everything we do. We believe in integrity and wrap our values and approach around betterment of our clients and community - every day.
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"Dale, Thanks so much for helping us buy our new home. Compared to our previous experience buying and selling homes, we found out firsthand what an experienced agent like you can do. You helped find the right home for us, and more importantly, negotiated an amazing deal. A home is our and often people’s largest asset. We are so fortunate that you were there every step of the process to protect our interests. We are not surprised that you are one of the most successful agents out there and we will definitely recommend you to our friends and colleagues. If anyone is in the process of getting in the market we will be glad to provide your reference and the highest recommendation."