Timing for Closing Disclosure Delivery

3-Day Closing Disclosure Rule

Under the new CFPB regulations, the borrower must “receive” a copy of the Closing Disclosure at least three (3) business days prior to closing. The Closing Disclosure is presumed to have been received three (3) business days after it is dropped in the mail or sent via email, so the practical result is that most Closing Disclosures will need to be sent a full six (6) business days before the closing date. Business days are defined as all calendar days except Sundays and certain federal holidays.

The Consumer Financial Protection Bureau (CFPB) is an independent federal agency that holds primary responsibility for regulating consumer protection with regard to financial products and services in the United States. The CFPB is issuing a rule requiring easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer.

The new “Know Before You Owe forms will replace the existing federal disclosure forms and help consumers both understand a mortgage better and make loan comparisons. The rule also requires that consumers receive these forms in advance of making key decisions, so they have time to process the deal before signing on the dotted line.

Starting October 3, 2015, mortgage lenders must use the new forms and homebuyers will be able to more clearly understand what they are getting into—the terms of the loan, their obligations, and what could possibly change.

 

TRID Terminology

The following is a list of some of the new terminology that the mortgage and real estate industries should familiarize themselves with concerning the TILA/RESPA Integrated Disclosures (TRID), which will be required as of October 3, 2015.

 

Will the New Mortgage Disclosures Delay My Closing?

The CFPB claims the new mortgage disclosure rules will not delay closing.

For mortgage applications submitted on or after October 1, 2015, lenders must give you new, easier-to-use disclosures about your loan three business days before closing. This gives you time to review the terms of the deal before you get to the closing table.

Many things can change in the days leading up to closing. Most changes will not require your lender to give you three more business days to review the new terms before closing. The new rule allows for ordinary changes that do not alter the basic terms of the deal.

CFPB Materials

The above information is provided for general information purposes only, not as legal advice, and shall not be binding on Allegiance Title Company. For more information, go to

http://www.consumerfinance.gov/regulatory-implementation/tila-respa/