Coming August 1 2015 Simplified Mortgage Disclosures For Clients

Coming August 1 2015 Simplified Mortgage Disclosures For Clients

KnowBefore You Owe

For most Americans, buying a home means taking out a mortgage loan. The Dodd-Frank Act requires us to combine the Truth in Lending Act andReal Estate Settlement Procedures Act disclosures. You receive these disclosures shortly after you apply for a mortgage and shortly before     you close on the mortgage.

Our new disclosures are easier to understand and use than the existing disclosures. In addition, the Loan Estimate you get after you applyfor a mortgage and the Closing Disclosure you get before you closeare designed to work with each other.


 WHAT THE NEW SIMPLIFIED MORTGAGE DISCLOSURES MEAN FOR CONSUMERS


Mortgages are complex transactions that may include risky features, so we’ve issued a rule that will simplify and improve disclosure forms for mortgage transactions. Consumers currently receive different, butoverlapping federal disclosure forms with the terms and costs ofmortgage loans. Because these forms are confusing for many people,Congress directed the Bureau to create new forms. 

The rule replaces the current forms with two new forms: the Loan Estimate, given three business days after application, and the Closing Disclosure, given three business days before closing. Lenders will be required to give consumers these forms for mortgage applications submitted on or after August 1, 2015. 

Specific benefits of the new forms and rules include:

 • Combining several forms and additional statutory disclosure requirements into two forms. This will reduce paperwork and consumerconfusion. 

• Using clear language and design that will help consumers understand complicated mortgage loan and real estate transactions.

 • Highlighting the information that has proven to be most important to consumers. On the new forms, the interest rate,monthly payments, and the total closing costs will be clearly presented on the first page. This will make it easier for consumers to compare mortgage loans and choose the one that is right for them.

 • Providing more information about the costs of taxes and insurance and how the interest rate and payments may change in the future. This information will help consumers decide whether they can afford the  mortgage loan and the home, now and in the future.

 • Warning consumers about features they may want to avoid, like penalties for paying off the loan early or increases to the mortgage loan balance even if payments are made on time.

 • Making the cost estimates consumers receive for services required to close a mortgage loan more reliable, for example, appraisal or pest inspection fees. The rule prohibits  increases in charges from lenders, their affiliates, and for services for which the lender does not permit the consumer to shop unless a specific exception applies. Examples of the specific exceptions include when information provided by a consumer at application was inaccurate or becomes inaccurate, or when the consumer asks for a change in the services.

 • Requiring that consumers receive the Closing Disclosure at least three business days before closing on the mortgage loan. Currently, consumers often receive this information at closing or shortly before closing. This additional time will allow consumers to compare the final terms andcosts to the terms and costs they received in the estimate. That willbetter equip them to raise any questions before they go to the closing table.

What to do if your lender doesn’t follow the rules If you think your lender is not following the rules that apply to mortgage disclosure,the Consumer Financial Protection Bureau wants to know. You can getin touch with us in any of these ways. 

Online:www.consumerfinance.gov/complaint

Bytelephone (in 187 languages): 855-411-CFPB (2372)

Español855-411-CFPB (2372) TTY/TDD 855- 729-CFPB (2372) 8 a.m. to 8 p.m.Eastern, Monday–Friday By mail:

Consumer Financial Protection Bureau

P.O.Box 4503

Iowa City, Iowa 52244

By fax: 855-237-2392

The rules governing mortgage disclosure are among many rules that protect you when you get a mortgage. Our website has information on manyother consumer protection laws and regulations that apply tomortgages at consumerfinance.gov/regulations/


Blogsubmitted by: Cyndi Cobb of The Real Estate Market Place – Sourcedby consumerfinance.gov - Servicing the Greater Fort Hood andsurrounding areas which includes: Killeen, Harker Heights, Temple,Belton, Copperas Cove, Lampasas, Kempner, and Nolanville. Feel free to call if you have any questions regarding Central Texas Real Estate.


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Phone: 512-564-0381
Dated: June 3rd 2015
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