CFPB Provides Guidance on Proper Disclosure of Construction Loans

Filed in Codes and Regulations, Housing Finance by on January 12, 2016 0 Comments

HousingFinanceThe Consumer Financial Protection Bureau (CFPB) has released new guidance and resources to help lenders properly disclose construction loans under the new mortgage lending rules enacted in October.

The new rules replaced the Good Faith Estimate, the Truth in Lending and HUD-1 Settlement Statements with 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 may be delayed.

CFPB’s resources include:

  • Construction loan fact sheet. An overview of how the integrated disclosure rule may be applied.
  • Compliance guide. A plain-language guide to the new rules in an FAQ format which makes the content more accessible for industry constituents, especially smaller businesses with limited legal and compliance staff.
  • Guide to forms. Provides detailed, illustrated instructions on completing the Loan Estimate and Closing Disclosure.
  • Closing fact sheet. An overview of the limited circumstances when changes to the loan require a new three-day review.
  • Disclosure timeline. Illustrates the process and timing of disclosures for a sample real estate purchase transaction.
  • Integrated loan disclosure forms and samples. Downloadable Loan Estimate and Closing Disclosure forms in both English and Spanish and samples for different loan types.

CFPB will also conduct a series of webinars to address implementation of the new rule. Please note that registration is required to view the recordings. Topics include an overview of the rule, frequently asked questions, loan estimate form, closing disclosure form and implementation challenges.

View more details.

For more information, contact Steve Linville at 800-368-5242 x8597.

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