Page 27 - Leisure Living Magazine July 2017

New Real Estate Closing Disclosures: Know Before You Owe
“Law You Can Use” Courtesy of the Ohio State Bar Association
The Consumer
Financial
Protection Bureau
(CFPB) now
requires that new
integrated mort-
gage disclosures
be used when res-
idential real estate
is purchased or
refinanced. These
disclosures are
part of the sweep-
ing federal “Know Before You Owe” law, created under the Dodd-Frank Wall Street Reform and Consumer Protection Act. This law applies to most residential loan applications made after October 3, 2015.
Q: What is TRID?
A: The new integrated mortgage disclo- sures are commonly called TRID (TILA-RESPA Integrated Disclosures). These disclosures com- bine the preliminary Truth in Lending (TIL) disclosure, the final TIL disclosure, the loan ser- vicing disclosure, the Good Faith Estimate (GFE) and the HUD-1 Settlement Statement into just two new forms.
Q: What are the two new forms?
A: The two new forms are the Loan Estimate and the Closing Disclosure. They are designed to help consumers more easily understand import- ant loan terms and give them a better opportuni- ty to shop for services.
Q: What is the Loan Estimate?
A: A consumer must receive the Loan Estimate within three days after making a loan application with a lending creditor. The Loan Estimate provides easy-to-read informa- tion about the interest rate, monthly payments, escrows for taxes and insurance, pre-payment penalties, adjustable rates and closing costs. It is not necessary to sign an official loan applica- tion form before receiving the Loan Estimate, as long as you’ve given the creditor the address of the property, the loan amount you are request-
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ing, basic income information, the estimated property value, your name and your Social Security number.
Q: Can the creditor charge me fees when I make a loan application?
A: No, but you may be charged for the
costs to obtain a credit report. The creditor can- not collect any other fees from you until you’ve received the Loan Estimate.
Q: What do I do after I receive the Loan Estimate?
A: Compare the terms on all the Loan Estimate forms you receive from different cred- itors so you can determine which loan is the best fit for you. Once you have decided, you will notify the chosen creditor that you intend to proceed with the loan.
Q: What happens after I tell the creditor I want to proceed?
A: The creditor will begin the loan approval process, obtain a real estate appraisal and order a property title examination.
Q: What is the Closing Disclosure form?
A: The Closing Disclosure tells you all the final figures and amounts for your closing, important contact information for the creditor and service providers, the interest rate, monthly principal and interest, origination charges and a calculation of the cash needed to close. The cred- itor must give you the Closing Disclosure at least three business days before your closing.
Q: Must Closing Disclosure fees and charges match those on the original Loan Estimate?
A: Generally, yes. The creditor cannot change certain loan charges, such as the origina-
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