PRIOR TO AUGUST 1 2015
Federal law has required all lenders to provide two disclosure forms to consumers when they apply for a mortgage (Good Faith Estimate and early Truth In Lending Act form) and two forms before they close on a home loan (HUD-1 Settlement Statement and final TILA).
AUGUST 1 2015 FORWARD
In an effort to create greater levels of transparency and make understanding the numbers much less confusing for consumers purchasing or refinancing a home, the Consumer Financial Protection Bureau (CFPB) was established.
Residential loans originated after August 1 2015 will be subject to what is known as The Rule. The Rule replaces the Good Faith Estimate and early Truth In Lending Act form with a document called a Loan Estimate and replaces the final TILA form with a document called a Closing Disclosure.
Along with these new forms are new regulations which require timetables for delivering information to consumers. These regulations will have an impact on when closings can occur.
Being a new system, lenders and escrow companies will be making changes and it will take some time to work out the kinks and get to smooth sailing. There is something buyers planning to purchase after August 1 2015 can do: THINK LOCAL. By getting your home loan from a local bank and using a local escrow company you’ll be able to avoid mishaps of this federal program that are ripe to occur when dealing with out-of-state entities that have different real estate practices than the State of Washington.
To help you search for a local bank, you can use this link from the Washington State Department of Financial Institutions site where you an find a list of Washington State Chartered Banks.
To learn more here’s the link to the Consumer Financial Protection Bureau.