South Carolina Realtors (SCR) are alerting its members and the public about changes to the Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) that will result in significant changes to the closing process when they go into effect on Aug. 1.
“It’s crucial that Realtors and consumers understand these new procedures so that there are no surprises at the closing table,” SCR CEO Nick Kremydas said.
The changes were made by the Consumer Financial Protection Bureau, which is integrating RESPA and TILA disclosures and regulations with new requirements from the Dodd-Frank Act. They are meant to improve consumer understanding of the mortgage process, aid in comparison shopping and help to prevent surprises at the closing table.
The major changes include: a new loan estimate document that replaces the Good Faith Estimate and the initial Truth in Lending disclosure; a new closing disclosure document that replaces and combines the HUD-1 and final Truth in Lending disclosures; and the requirement that loan estimates must be given to consumers within three business days of applying for the loan.
The types of loans covered include most closed-end consumer mortgage loans. The rule changes do not apply to home equity lines of credit, reverse mortgages, mortgages secured by mobile homes or by dwellings not attached to the property. They also do not apply to creditors who make five or fewer mortgage loans in one year.
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