by David Depman

August 2015 is shaping up to be the month you’ll be out. And by out, I mean leaving the office. Yep, vacation, baby! Sun, sand, waves and more. This year, the CFPB is helping Loan Officers across the country to select the dates for their vacation.

The CFPB is set to require lenders to use new forms that will take the place of a couple of current forms. The Good Faith Estimate disclosure and HUD-1 settlement statement created by the Department of Housing and Urban Development, will be fazed out as of August 1. Both of these forms are regulated by RESPA. They both carry penalties for incorrect information, but pale in comparison to the potential penalties from TILA. With TILA, the CFPB is adopting a hard line approach to the settlement fee estimates in the newly introduced Loan Estimate form. They’re also taking a tough stance on delivery of the new Closing Disclosure form to the borrower three days before the loan closing.

Anne Canfield, Executive Director for the Consumer Mortgage Coalition says, “Most of the disclosure items, some of which had been subject to the RESPA regime, now are under TILA and, therefore, carry very significant potential liabilities for even minor errors.” Additionally, lenders, not the settlement agents, will be held accountable for the accuracy of new closing disclosure as of August 1.

Tim Anderson, Director of e-Services at DocMagic (a document prep company) commented, “lenders are going to try to really push to get as many loans as they can closed by July 31 so they can reduce the pipeline of loans that carry over after the new regulations take effect.”

These changes to procedure will cause some pain and there are going to be some hiccups in the short term. We previously mentioned that eClosing is promising to change the industry by increasing transparency and comprehension of agreements for consumers, and reducing costs for loan originators. However, no matter what the end result is, the new forms can’t be used until the implementation date, meaning lenders potentially will have a period where they have two different disclosure processes.

That makes August look like the right time to get out of Dodge, and avoid the transition with as many loans closed as possible.  So, get planning for your vacation! When you get back, you can start closing with new forms!

Aloha!

Tell us how you plan to take off in August!