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Washington Buyer and Seller Guide for Title and Escrow
For more than 30 years, federal law has required all lenders to provide two disclosure forms to consumers when they apply for a mortgage and two additional short forms before they close on the home loan. These forms were developed by different federal agencies under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). To help simplify matters and avoid the confusing situations consumers have often faced when purchasing or refinancing a home in the past, the Dodd-Frank Act provided for the creation of the Consumer Financial Protection Bureau (CFPB) and charged the bureau with integrating the mortgage loan disclosures under the TILA and RESPA. In Plain English, Please On November 20, 2013 the CFPB announced the completion of their new integrated mortgage disclosure forms along with their regulations (RESPA Regulation X and TILA Regulation Z) for the proper completion and timely delivery to the consumer. These regulations are known as “The Rule”. Any residential loan originated after October 3, 2015 will be subject to the new rules and forms set forth by the CFPB*. The Rule replaces the Good Faith Estimate (GFE) and early TILA form with the new Loan Estimate. It also replaces the HUD-1 Settlement Statement and final TILA form with the new Closing Disclosure. The introduction of the new disclosure forms require changes to the systems that produce the closing forms. Fidelity National Title Group is already well underway in preparing our production systems to provide the new required fee quotes, prepare the new closing disclosure forms, and track the delivery and waiting periods required by the new regulations. CFPB Primary Goals: *Loans in progress (applications submitted prior to October 3, 2015) will use current TILA and RESPA forms. Easier-to-use disclosure forms Improved consumer understanding Better comparison shopping Avoid costly surprises at the closing table What is CFPB? After the 2008 financial meltdown, Congress established the Consumer Financial Protection Bureau (CFPB). It was created in 2011 after the Dodd-Frank Act was placed into effect. The Consumer Financial Protection Bureau provides information to consumers to understand financial agreements in which they enter. The CFPB strives to educate the purchaser on fair practices, enforce consumer laws, and analyze financial markets. 44 © Ticor Title Company WHAT IS CONSUMER FINANCIAL PROTECTION BUREAU? (CFPB) Know Before You Close Simple answers about the CFPB and how the new rules will change real estate transactions.
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