...or maybe you've heard about the Consumer Protection Financial Bureau's (CFPB) "Know Before You Owe" campaign. I wrote about mortgage docs being simplified a few months ago, and as expected, things have changed. The rulemaking is a good thing overall, but as with all regulatory changes, there may be a few kinks to work out during the implementation period.
Back in the day borrowers had no idea how much cash they would have to bring to settlement? Folks were really walking into the room to sign their final loan docs, and not knowing whether they'd receive a $1500 check or have to write a $10,000 check...pretty ridiculous. Then we had the financial crisis, thus the passage of Wall Street Reform in 2010, which created this new government consumer watchdog called the CFPB. The CFPB is implementing the "Know Before You Owe" or TILA-RESPA Integrated Disclosures Rule (TRID), which will soon give borrowers three days to review their final loan docs before going to settlement. This will take away the uncertainty of the past. The CFPB also revamped the forms you'll receive, so loan information will be simple and easy to understand.
Unfortunately, this change kind of caught the lending industry by surprise, and the logistical changes for many lenders will take some time to perfect. The good news is that the CFPB is now allowing a grace period for lenders to work out the kinks, particularly since they had originally planned to fine lenders for violations (even minor clerical errors) from day one of implementation.
What does this mean to me?
Some lenders have been preparing for these changes for years, and some lenders are just now implementing the changes. Therefore, if you're going to purchase or sell a home after October 3, 2015, your settlement dates may bump from 30 days to 45 days. Therefore, working with a lender who is prepared for TRID can make the difference between getting your dream home or losing it because the seller needs to be out of the place in 30 days. Be sure to work with the right lender, and an agent who can help you ask the right questions during the lending process.