Q: I have been informed that the HUD-1 Settlement Statement is being replaced by…
Q: I have been informed that the HUD-1 Settlement Statement is being replaced by a new disclosure form. Is this true and, if so, when will the replacement occur? How will this change affect closings and what new procedures should I expect?⠀ ⠀ A: You are correct. The HUD-1 Settlement Statement (the “HUD-1”), which is the standard form used nationally to itemize closing costs and fees charged to borrowers by lenders in connection with the purchase or refinance of residential real estate, will be replaced on August 1, 2015.⠀ ⠀ The replacement of the HUD-1 is part of a new Federal Law, the TILA-RESPA Integrated Disclosure Rule (the “Rule”). The Rule consolidates certain existing residential mortgage disclosures in an effort to make it easier for borrowers to understand important information regarding their loan. The Rule requires lenders originating residential mortgage loans (excluding lines of credit and reverse mortgages) to provide 2 new disclosure forms to borrowers, the Loan Estimate (the “LE”) and the Closing Disclosure (the “CD”).⠀ ⠀ The LE replaces the Good Faith Estimate and is required to be given to the borrower within 3 business days after receiving a borrower’s loan application. The CD replaces the HUD-1 and is required to be given to the borrower 3 business days prior to “consummation,” which is generally the closing date. ⠀ ⠀ Replacing the HUD-1 with the CD is not problematic, as the information set forth on both documents is similar. The important distinction is the required delivery date of the CD. ⠀ ⠀ Currently, a final HUD-1 with actual closing figures is not required to be provided to the borrower until the closing.
ความคิดเห็น
แสดงความคิดเห็น