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FAQ's for the Upcoming CFPB Changes: How to Prepare

Over the past few months, Land Title Guarantee Company has been teaching classes on the upcoming changes regarding the TILA-RESPA Integrated Disclosure Date. The effective date for the new forms has been proposed to become effective Saturday, October 3, 2015.

Throughout the classes, we compiled frequently asked questions that came up in multiple classes. Here are the top ten that were asked by REALTORS® throughout Colorado.

  1. Who will be monitoring the compliance of the new rules?
    The lender is responsible to comply with the new rules.
  2. When does the clock start on the Loan Estimate (LE)?
    When the lender has the following six items: name, Social Security number, income, address, approximate value of property and loan amount, the Loan Estimate is in effect. The Loan Estimate needs to be delivered within 3 days.
  3. When must the Closing Disclosure (CD) be delivered to the borrower (consumer)?
    Depending on the lenders delivery method, a week beforehand if delivering via mail or 3 days prior to closing (consummation).
  4. Can the 3 day disclosure period be waived?
    Only with a bona fide emergency. Do not rely on this occurring often. The loss of earnest money is not considered an emergency...!
  5. What would constitute a re-disclosure after the Closing Disclosure is issued?
    A change in the APR by 1/8%, a change in the loan product and/or addition of a prepayment penalty.
  6. Is Saturday considered a business day when counting the 3 days for delivery of the Closing Disclosure?
    Yes, that is considered a business day.
  7. Will both agents be given a copy of the Closing Disclosure?
    Only with the written consent of buyer and seller.
  8. Will a change in the seller's side require a re-disclosure?No.
  9. Is electronic delivery considered to be adequate delivery to meet the 3 days for the Closing Disclosure?
    Yes, if prior consent is provided and if it complies with the e-sign act.
  10. How will mail outs be handled?
    The lender will need to add additional delivery days in order for the consumer to receive the documents prior to the 3 days required period.

What else Can I do to be Prepared?In a recent article in Mortgage Compliance Magazine, Ken Trepeta, the Director of Real Estate Services for the National Association of REALTORS gave five suggestions on how to be prepared.

  1. Add 15 days to your transaction time.
    A normal real estate transaction that may typically take 30 days to close is recommended to make the contract 45 days. The unexpected are not clearly defined and the stranger the deal, the more potential for extra time being needed.
  2. Manage Closing Disclosure Timing:
    As soon as you know of any change to a contract, make sure to communicate that to the lender. Lenders need to review, approve,and issue every change and are liable for everything on the Closing Disclosure.
  3. Track Progress During the Transaction:
    Stay on top of everything during the transaction. Buyers shouldn't expect to make changes and sellers should not do anything that causes a change at the closing table.
  4. Embrace the Deadline:Make every effort to ensure you are prepared for October 3rd.
  5. Focus on Three Things Between Now and October 3rd:
    a) Maintain regular contact with your business partners (lenders, title providers, vendors, etc.)b) Avoid last minute change on your end
    c) Help your business partners avoid last minute changes on their end.

Please Contact a Land Title Employee for further information on the upcoming changes. Feel free to ask about scheduling a class to educate your office on TRID and its impact as of October 3, 2015.

Disclaimer: This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal or accounting advice or other expert assistance is required, the services of a competent professional should be sought.
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