Something you should be thinking about with the changes coming in August resulting from the integrated TILA-RESPA rules required under Dodd-Frank. Wells Fargo has made their decision (Well’s Decision), have you?
Under the new rules a lender is required to provide the borrower with a new disclosure, known as the Closing Disclosure, within 3 business days prior to the loan’s consummation. Consummation is when the consumer becomes legally responsible for the debt under the contract. This new form will replace the present HUD 1. As of now, the responsibility for the preparation and delivery of the HUD 1 is being handled by a settlement agent; being a title company, agent or attorney.
Not so for loans with application dates as of August 1, 2015. The responsibility for providing this info, and its accuracy, then falls on the Lender. The Lender may choose to continue to utilize the services of a closing agent for this purpose, but when doing so remains fully responsible, and accountable, for this activity.
In view of the new rules, lenders need to make a choice; continue to use the services of the various closing agents for the initial distribution of the information, or handle it in house (like Wells). Either way, they’ll need to have systems and processes in place to ensure the information disclosed is accurate and in accordance with what was disclosed previously for fees and costs. They must also include the seller information with any liens to be paid off. Most of all, the disclosure must be delivered to the consumer on time.
By the way, if things change after the issuance of the Closing Disclosure the lender may be required to postpone the closing and issue a new disclosure with a new 3 day waiting period. If you don’t know the rules you better find out soon. It’s not just a new form; it’s a whole new ball game.
The rules have changed. Play different.