The Consumer Financial Protection Bureau (CFPB) has a stated mission to “make markets for consumer financial products and services work for Americans.” On the mortgage side, this includes helping consumers better understand their options as they search for real estate loans.
With this mission in mind, it’s important for lenders and real estate professionals to understand the CFPB’s new mortgage lending rule and forms, which will apply to all applications submitted August 1, 2015 and after. So what do you need to know, and where can you go to find it?
Lenders: You’re more aware than anyone else what the parties to real estate transactions will face. You will be responsible for ensuring that your borrower receives the Loan Estimate three business days after they apply, and Closing Disclosure forms three business days before they close.
Your financial institution (bank or non-bank) must also have documented processes for supervising your third-party vendors, such as title and settlement service providers. With Stewart’s extensive preparation for regulations from the CFPB and other agencies, you can be confident in our ability to comply with rules, laws and policies.
Real estate professionals: As the focal point for real estate transactions, you will be affected by a number of CFPB rules and regulations. You’ll need to clearly and accurately talk clients through the new process and forms. This will also affect the timing of transactions based on the three-business-day rules for providing the Loan Estimate (after application) and the Closing Disclosure (before closing).
In addition, homebuyers will face the Ability-to-Repay/Qualified Mortgage rules, and the more stringent loan underwriting requirements those rules will bring. Your support and guidance will be even more valuable than before. Stewart is your source for information and expertise as you and your customers face the new regulatory environment.
Take a look at the CFPB’s Know Before You Owe site for mortgages, with basic information, sample forms, and much more. The bureau has also provided a quick reference guide, “What the new simplified mortgage disclosures mean for consumers.” Its simple breakdown of how the new lending rule benefits consumers will provide a clearer understanding for lenders and other professionals, too. Consider using this information as talking points to get you started.
As implementation of the CFPB mortgage lending rule draws closer, Stewart continues to be the thought leader in preparing our customers, associates and network of independent agencies for what’s to come. Check out the CFPB guide at stewart.com for a range of information, links and the latest news and developments.*
* Please confirm you’re in compliance with state Department of Insurance regulations before using CFPB resources, content or information from stewart.com and work with your attorneys for any legal advice.