Changes to Mortgage Loan Procedures
The Consumer Financial Protection Bureau (CFPB) is that government agency. In October 2015, CFPB released information about new federal guidelines that will affect the mortgage lending process, making it easier for borrowers to understand the transaction.
Effective October 3, 2015, those who apply for “most mortgages” on or after that date will find additional help thanks to some new requirements on mortgage lenders.
The CFPB official site states, “the stress of shopping for a mortgage will be reduced, as our new mortgage disclosure rule takes effect. The new rule and disclosures ease the process of taking out a mortgage, helping you save money, and ensuring you know before you owe”.
What are these changes? ConsumerFinance.gov reports:
- Four overlapping disclosure forms will be streamlined into two forms, the Loan Estimate and the Closing Disclosure.
- More time to examine closing documents. (At the time of this writing) lenders must give you your HUD-1 Settlement Statement disclosure 24 hours in advance, if you request it; after October 3, 2015 borrowers receive their Closing Disclosure three business days prior to signing the forms and accept the terms of the mortgage, no request needed.
- The new forms will make it easier to understand complicated mortgage terms.
- The Loan Estimate makes it easier to shop around and compare loan offers from multiple lenders. Consider applying for loans from at least three lenders before choosing a mortgage so you can find the best deal for you.
Are you applying for an FHA mortgage? It’s strongly recommended to contact the FHA/HUD for a referral to a housing counselor as mentioned above. Contact the FHA directly at 1-800-CALL-FHA to request a referral to a local, HUD-approved housing counseling agency.
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