On the first of August, real estate industry professionals and consumers should be prepared that last-minute changes occurring three days before closing will become much more challenging to make. The Consumer Financial Protection Bureau is combining mortgage forms and disclosure documents that will be required to be given to clients much earlier, which means any changes after the fact could quickly derail a closing date.
One major change coming on Aug. 1 is that the HUD-1 Settlement Statement is being replaced by the “Closing Disclosure” or “CD,” which basically will summarize the terms and charges of the loan. Lenders will be required to deliver the CD to consumers three days prior to closing. If any changes are needed on the CD during that three-day period, the customers’ closing likely will be delayed. As of Aug. 1, the CFPB also will be combining two common forms used in lending — the Good Faith Estimates and Truth in Lending Disclosures. The two forms will be combined into a single form known as the “Loan Estimate” or “LE” form.