With the upcoming changes to TILA & RESPA requiring two new disclosures; the Loan Estimate and the Closing Disclosure comes new potential for stricter penalties for failures to comply (NMN 11-3 Story).
With the combination of the requirements for the new disclosures under TILA & RESPA, enforcement will now fall under TILA, which carries much stricter penalties. Under the new law the lender is responsible for providing the new Closing Disclosure, which replaces the existing HUD-1, AND is also fully responsible for its accurate completion.
The lender may delegate this responsibility to a closing agent but remains accountable and liable for any errors. CFPB has determined that the lender/creditor is the professional entity responsible for servicing and protecting the consumer. The lender may contract with other service providers but ultimately in the end it all falls on the shoulders of the lender. You better be prepared.
How do you plan on handling your loan closings? The same old way; send the paperwork to a settlement agent and have them issue the new Closing Disclosure and conduct the closing. Or, prepare all the paperwork in house, including the Closing Disclosure, with all fees and charges, for both the seller and buyer, with specific instructions to a settlement agent to close the loan exactly as instructed? Either way you need to have systems and processes in place to carefully monitor your loans progress and ensure you get it exactly right before the loan closes whichever route you choose. You can’t afford mistakes.
This is much more than developing and programming a couple of new forms. This changes the game.