New Mortgage Lending Rules Take Effect Tomorrow

The Consumer Financial Protection Bureau’s (CFPB’s) new mortgage lending rules will take effect Oct. 3.

NAHBNow has reported on the impending changes over the past few months to help our readers prepare and avoid any unwanted closing delays.

Beginning tomorrow, the Good Faith Estimate, the Truth in Lending and HUD-1 Settlement Statements will be replaced by the CFPB’s new integrated disclosure forms, the “Loan Estimate” and the “Closing Disclosure.”

The biggest change is that the Closing Disclosure must be provided to the consumer a full three days prior to closing, and if there are certain changes during that 72-hour period, the closing could be delayed.

CFPB recognizes the “significant systems and operational changes” that are required by institutions to comply with the rule. While falling short of offering a hold-harmless period for the initial months of the new process that NAHB and industry allies requested, CFPB Director Richard Cordray indicated in an Oct. 1 letter to the American Bankers Association that examiners will recognize good-faith efforts to comply.

Listen to the replay of NAHB’s June 24 webinar to prepare those in the residential construction field for the changes, explaining how to work proactively with lenders and settlement stakeholders to avoid unnecessary delays to home closings.

Visit NAHB’s website to learn more about the new rules and download resources to help you comply.

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