Russell & Associates — Massachusetts Employment & Real Estate Law

What You Need to Know About the TILA-RESPA Integrated Disclosure rule

In All, Article, Real Estate by Derek

If you are a lender, mortgage broker, residential real estate attorney or real estate agent, you should be aware of these changes to ensure that you are complying with the TILA-RESPA Integrated Disclosure rule. Version 2.0 of the TILA-RESPA Integrated Disclosure rule went into effect in March 2015; updates included: 1) extending the timing requirement for a revised disclosure once consumers lock a rate or extend a rate lock after being provided with the loan estimate, and 2) permitting certain language related to construction loans for transactions involving new construction on the loan estimate.

As of August 2015, the following changes will go into effect:

1. The Good Faith Estimate (GFE) and initial Truth-in-Lending disclosure (initial TIL) have been combined into one new form, the Loan Estimate.
a. Purpose: this new Loan Estimate form provides disclosures that help consumers understand key features, costs and risks of the mortgage loan for which they are applying.
b. Due Date: the Loan Estimate must be provided to consumers no later than the third business day after they submit a loan application.
2. The HUD-1 and final Truth-in-Lending disclosure (final TIL) have been combined into one new form, the Closing Disclosure.
a. Purpose: this new Closing Disclosure form provides disclosures that help consumers understand all costs involved in the transaction.
b. Due Date: the Closing Disclosure must be provided to consumers at least three business days before consummation of the loan.

These new forms were created to make it easier for consumers to find key information, to help them determine whether they can afford the loan, and to help compare the costs of different loan offers over time. The final rule applies to most closed-end consumer mortgages, but it does not apply to: HELOCs, reverse-mortgages, mortgages attached to a mobile home or dwelling that isn’t attached to real property, or loans made by persons not considered to be “creditors” (those who make five or fewer mortgages per year).

You can review the guide to this rule HERE.

You can review the complete rule HERE.

If you have not already done so, please complete our CFPB Lender Questionnaire.