This will be the third version of this post since I started writing The Mortgage Porter in late 2009. Things have overall changed for the better for consumers when it comes to the closing procedure. Last month, two new disclosures, the Loan Estimate and Closing Disclosure, were introduced replacing the Good Faith Estimate and HUD-1 Settlement Statement effective for loan applications dated October 3, 2015 and after. This post applies to loans originated after October 3, 2015. If your loan application is dated prior to October 3, 2015, you should refer to this post instead.
New Mortgage Disclosures additional Wait Periods to Mortgage Transactions
October 21, 2015 by 1 Comment
Effective on mortgage applications taken October 3, 2015 and later, lenders are required to use two new disclosures created by the CFPB. The Loan Estimate, which replaces the 2010 Good Faith Estimate and the RegZ/Truth in Lending; and the Closing Disclosure, which replaces the HUD-1 Settlement Statement.
The new disclosures, the Loan Estimate and the Closing Disclosure, have “wait periods” that restrict how soon a real estate transaction with a mortgage can close. The Loan Estimate is issued once a lender has received an application (the six points of information that creates an application per the CFPB) within three business days. There is a seven day waiting period that takes place once the Loan Estimate has been delivered before the borrower can sign their final loan documents (also referred to as “consummation”).
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