Subdivisions: TILA-RESPA Integrated Disclosure Rule Goes Into Effect August 1, 2015
Mortgage lenders should be preparing to implement the Consumer Financial Protection Bureau’s (“CFPB”) TILA-RESPA Integrated Disclosure (“TRID”) Rule, which is scheduled to take effect on August 1, 2015 and applies to most closed-end consumer mortgages. Issued in November 2013, the TRID Rule amends portions of Parts 1024 and 1026 of Title 12 of the Code of Federal Regulations.
The TRID Rule is a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which directed the CFPB to publish rules and forms that combine certain disclosures that consumers receive in connection with applying for and closing on a mortgage loan under the Truth in Lending Act (“TILA”) and the Real Estate Settlement Procedures Act (“RESPA”). Historically, under TILA and RESPA, two different federal agencies separately developed disclosure forms to be provided to consumers in conjunction with consumer mortgages.
With the TRID Rule, the current disclosure forms are integrated and replaced with two new forms: the Loan Estimate Form and the Closing Disclosure Form. The Loan Estimate Form provides key features, costs, and risks of the mortgage loan and must be provided to consumers no later than the third business day after they submit a loan application.The Closing Disclosure Form contains the actual terms and costs of the transaction and must be provided to consumers at least three business days before the closing of the loan. If the creditor makes certain specified significant changes between the time the Closing Disclosure Form is given and the closing of the loan, the consumer must be provided a new form and an additional three-business-day waiting period after receipt of the new form before the closing of the loan.
The Loan Estimate and Closing Disclosure forms are required for mortgage applications received on or after August 1, 2015. Other TRID Rule requirements take effect on August 1, 2015 as well, including restrictions on certain activity prior to a consumer’s receipt of the Loan Estimate Form.
CFPB has published compliance guidance and sample disclosure forms available HERE.
If you have any questions regarding the new disclosure forms or compliance with the TRID Rule, please contact a member of the Firm’s Subdivision Department.