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Getting Ready for the TILA-RESPA Integrated Disclosure
  

As you may know, changes are coming again to the HUD Settlement Statement and related closing disclosure documents. We want you to be prepared for the new rules and new forms that will go into effect on August 1, 2015. To that end, Sue Ellen Rogal, Underwriting Counsel in our Boston office, has put together the following memo, together with a plan for future informational bulletins and webinars. If you have any questions about the new Loan Estimate and Closing Disclosure forms, please contact her at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

It may not feel that close, but August 1, 2015 is less than 5 months away! On that day, the Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (Regulation X) and the Truth In Lending Act (Regulation Z) final rule becomes effective, and will apply to transactions for which the lender receives an application on or after that date. Because application of the rule, and use of the new forms, turns on the date of loan application, and not the closing date, you may still be asked to close loans after August 1st using the current TIL and HUD Settlement Statement, if the application was submitted prior to August 1st.

The final rule creates two new forms – the Loan Estimate and the Closing Disclosure. The Loan Estimate is a 3-page form which looks like a combination TIL/GFE. It is designed to provide consumers with information which may be helpful in understanding the features, costs and risks associated with the mortgage loan for which they are applying. The Loan Estimate must be provided to consumers no later than three (3) business days after they submit a loan application. The Closing Disclosure is a 5-page form and looks like a combination TIL/GFE/HUD. It is designed to provide consumers with information helpful to understand the costs associated with their mortgage loan. The Closing Disclosure must be provided to consumers three (3) business days before consummation. Consummation is a defined term, and it occurs when the consumer becomes contractually obligated to the creditor on the loan. (Because we don’t disburse until we record in Massachusetts, I think consummation date will equal closing date for purchases, but for a refinance, consummation may be the disbursement date. TBD)

The two new forms must be used for most closed-end consumer mortgages. It is important to note that home equity lines of credit, reverse mortgages and mortgages secured by a mobile home (or other dwelling not attached to real property) are not subject to the new rule, and will continue to use the separate TIL and HUD forms now in use. [Note: A home equity loan is subject to the new rule. The distinction is between line (open-ended, consumer writes checks in amounts that vary) and loan (closed-ended, one-time payment to consumer).] The TILA-RESPA rule does not apply to commercial transactions; it does not apply to mortgage loans made by individuals who are not considered “creditors” because they make 5 or fewer mortgages per year (i.e. mortgages given by family members).

 

 
 
(TILA-RESPA Cont.)

The Consumer Financial Protection Bureau has put together several downloadable guides, together with sample forms and a disclosure timeline; you may find these on the CFPB’s website at www.consumerfinance.gov/regulatory-implementation. The TILA-RESPA Integrated Disclosure rule Small entity compliance guide is a 91-page document and is written in an easy-to-read FAQ format. (No, really, I mean that!) I think this will end up being the resource we turn to when questions arise in practice. The TILA-RESPA Integrated Disclosure Guide to the Loan Estimate and Closing Disclosure forms is 98 pages long; while also easy to read, it’s more like a text book, with a little more detail. Grit your teeth and read the forms guide first – it makes the timeline and forms easier to understand and the FAQs easier to follow. Start reading now, so that when your lenders ask if you’re ready, you’ll be able to say YES!

To help with your preparation, we will be posting TILA-RESPA Integrated Disclosure facts on our Facebook page and website, and conducting a series of free webinars for our agents. Follow us at www.facebook.com/titleinsurance and www.fnf-ma.com.

Our company will be issuing monthly video messages regarding the TILA-RESPA changes – follow this link to see them all.

E-recording Debits from Escrow Account

As the business practice of e-recordings has steadily increased, any firm that utilizes an e-recording service (i.e Simplifile), must have a separate recording account in place. In no instances should an outside vendor have the ability / permission to withdraw funds from a general escrow account.

Wonderful News - LetterTRAX is getting a makeover!

What: You will find a fresh, sleek look that is friendly and intuitive to create closing protection letters. Now you can edit, void and view the history of letters created on multiple web browsers, including Safari. The new functionality also allows for multiple recipient letters to be created at the same time.

When: Training video is available on AgentTrax.

Questions? Please contact your agency representative!

 

Web Based Seminars

The TILA-RESPA Integrated Disclosures Webinar Series is here! Click here  to see the full schedule. Click here to put your email address on our evite list.


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