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CFPB Issues ‘Final Rule’
The Consumer Financial Protection Bureau [“CFPB”] has issued its long-awaited Final Rule, formally known as Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act [“RESPA”] (Regulation X) and the Truth-in-Lending Act [“TILA”] (Regu- lation Z). It was published in the Federal Register in November, 2013, and becomes effective on August 1, 2015. The current RESPA rule went into effect on January 1, 2010, and is the basis for the HUD-1 Settlement Statement and Good-Faith Estimate [“GFE”] forms currently in use.
 
            The CFPB was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which also transferred HUD’s RESPA jurisdiction to the CFPB. Section 1032(f) of Dodd-Frank required the CFPB to propose for public comment rules and model disclosures that integrated the TILA and RESPA  requirements. CFPB accordingly published drafts of the mortgage and settlement disclosures in May and November 2011 (respectively). This was followed in July 2012 by a series of proposed regulations, over 1,000 pages in length, collectively known as the proposed “Final Rule” (or as the TILA-RESPA Proposal). The ultimate version of the Final Rule, which does not take effect until August 1, 2015, is 1,888 pages in length. It replaces the HUD-1 Settlement Statement and GFE (respectively) with   two new documents known as the Loan Estimate and the Closing Disclosure.
 
According to the CFPB: “The…Loan Estimate is designed to provide disclosures that will be helpful to consumers in understanding the key features, costs and risks of the mortgage for which they are applying. This form will be provided to consumers within 3 business days after they submit a loan application. The … Closing Disclosure is designed to provide disclosures that will be helpful to consumers in understanding all of the costs of the transaction. This form will be provided to consumers 3 business days before they close on the loan. 
 
            “The forms use clear language and design to make it easier for consumers to locate key information, such as interest rate, monthly payments, and costs to close the loan. The forms also provide more information to help consumers decide whether they can afford the loan and to compare the cost of different loan offers, including the cost of the loan over time.” 
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