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Fair Lending Practices That Protect You

By May 14, 2015January 13th, 2016Judi's Blog


The excitement that you feel about buying a new home is certainly rewarding, and fortunately, the pathway into that home will require just a little more time and patience but will offer added protection for the homebuyer.

In anticipation of Fair Lending practices and laws that are changing effective this August 1, 2015, Realtor Judi Wright wants to provide homebuyers with helpful information on how the changes instituted by the CFPB (Consumer Financial Protection Bureau) will impact consumers.

These new rules are designed to help and protect buyers by requiring easier-to-use mortgage disclosure forms that clearly state the terms of a mortgage for the homebuyer. The new “Know Before You Owe” mortgage forms will replace the existing federal disclosures and better enable borrowers to understand their options, choose the deal that’s best for them, and avoid any surprises at loan closing.

Beginning this coming August 15, the Loan Estimate consumers will receive after applying for a mortgage will effectively replace the current Good Faith Estimate. And, the Closing Disclosure the customer will get before the loan closing replaces the long-standing Settlement Statement form.

The new disclosures will be easier to digest and use than are the existing disclosures. Both the Loan Estimate, which provides a summary of the key loan terms and estimated loan and closing costs, and the Closing Disclosure that provides a detailed accounting of the transaction, are designed to work in tandem with each other. Both disclosures were tested as in a quantitative validation study that resulted in participants providing more correct answers about a sample mortgage than they did using the forms they are replacing.

These disclosures, which are required by the Truth in Lending Act and the Real Estate Settlement Procedures Act, combine existing disclosures with new disclosure requirements from the Dodd-Frank Act.

In addition, the rules offer more protection for consumers by requiring a three business day period for receiving the Loan Estimate  after they submit a loan application, and receiving a final Closing Disclosure three business days before the closing date. This additional time helps consumers by enabling them to compare the final terms and costs to the terms and costs they received in the estimate. As a result, buyers will be better equipped to ask questions and be better prepared at loan closing.  Be aware, these changes could affect how realtors, lenders and buyers do business.  Last minute changes will no longer be easy to make without extending the closing date.  Currently, if a repair can’t be completed or a seller offers dollars in lieu of cleaning, a quick change to HUD closing statement is made and closing proceeds on schedule.  These changes will no longer be able to happen without a new 3 day wait.  To eliminate stress and delayed closings, be sure you are utilizing a skilled realtor and lender.

Realtor Judi Wright hopes the new rules will make it easier for consumers to shop e for mortgages and to make the decisions that work for them. Ms. Wright will work closely with buyers to enhance their understanding of the new rules and how those rules work for them.

Please feel free to contact Realtor Judi Wright at [email protected] or call her at (214) 597-2985 with any questions that you might have about the new CFPG rules and how they can help you.

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