Boca Mortgage Blog

New Mortgage Transparency Rules To Go In Effect August 1st

July 28th, 2015 2:28 PM by Leonard Silvestri

Blindsiding, term misconceptions, charges, fees and a lack of complete disclosure were just some of the nightmares facing homebuyers at the height of the foreclosure crisis. Those dark days are over however as the Consumer Financial Protection Breau has been working on creating transparency in loan process since 2011 and a payoff is about to go in effect. This year, what is being known as the TILA-RESPA Integrated Disclosure rule will change the way loan seekers will interact with the disclosure rules for their mortgage.

Starting October 3rd, two new "Know Before You Owe" forms will replace four current forms and introduce buyers to the mortgage process in a simpler way. These two new forms will walk consumers through the process every step of the way to better understand the loans and fees they're paying.

The new forms have received much praise from all entities involved in the home buying process. "The forms are fantastic. They are just awesome," says Casey Fleming, mortgage professional and author of "The Loan Guide: How to Get the Best Possible Mortgage." And since the forms are standard, they make it much easy compare rates and fees from multiple lenders while mortgage hunting.

The Loan Estimate Form will be revised to pinpoint a number of confusing factors including:

  • Interest rates
  • Fees for both lender and third-party services
  • Estimated closing costs
  • Right to shop services
  • Payment penalties
  • Future expected changes in interest rates

The Closing Disclosure will also be revised to iron out details in:

  • Final figures for closing costs
  • Prepaid taxes and insurance
  • Payments
  • Fees and mortgage terms
  • Payment costs by buyer and seller
  • Real estate transaction cuts

New rules are scheduled to go in effect August 1st but lenders have 60 days to meet compliance. While praise for the new rules has been overwhelmingly positive, real estate agents fear it will delay the closing process and many agents are adding 15 days to contracts to make up for delays.

Posted in:General and tagged: home mortgage
Posted by Leonard Silvestri on July 28th, 2015 2:28 PM


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