More changes on the way

by
blog-author-clayjeffreys3

There is more than just pollen in the air… change is in the air too!

Starting in August 2015, the Consumer Finance Protection Bureau (CFPB) will reshape the way loan terms and details are disclosed to borrowers. This is the second change being made to the Good Faith Estimate and the HUD-1 (settlement statement). The original change turned the Good Faith Estimate from a one page document into a three page document. The HUD-1 only increased from two to three pages.

This time the Good Faith Estimate will stay at three pages. The HUD-1 will increase from three to five pages!

I’ll spend a couple posts discussing the new Good Faith Estimate and the HUD-1. Today, we’ll focus on when to get started with the Good Faith Estimate.

Currently, the main time period Lenders must be aware of is the 3 day disclosure requirement from the time a loan officer receives 6 crucial pieces of information. Once these 6 things are provided, we now have an official loan application.

  1. Borrower(s) Name
  2. Borrower(s) Income
  3. Borrower(s) Social Security Number
  4. Property Address
  5. Estimated value of the property being purchase (or refinanced)
  6. Mortgage Loan Amount.

Once there is an official loan application, a borrower should be given a Good Faith Estimate within 3 business days. There are still requirements for re-disclosing terms of a loan should the rate change or APR increase more than a certain amount during the loan process.

These aspects of the loan process are not changing, but change is coming. Next time, we’ll move into the ins-and-outs of the new Good Faith Estimate.

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One Response to “More changes on the way”

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