New integrated loan disclosure rule delayed

The Consumer Financial Protection Bureau (CFPB) is proposing to delay the implementation of the integrated disclosure rule. This rule required mortgage loan originators to use the new loan estimate and closing disclosure beginning August 1, 2015. The CFPB has proposed a pushback of the implementation date to October 3, 2015.

In a statement by CFPB Director Richard Cordray, the decision to delay is due to both:

an administrative error; and
to provide more time for consumers and providers to adapt during the busy closing season before the start of school.

Mortgage loan originators (MLOs) may not use the loan estimate and closing disclosure before the deadline — now proposed as October 3.

The loan estimate form combines and replaces the Truth-in-Lending statement and the Good Faith Estimate (GFE) and is delivered to the homebuyer within three business days of submitting a mortgage application.

The closing disclosure form combines and replaces the final Truth-in-Lending statement and the HUD-1 Settlement Statement. This form is provided within three business days of closing and summarizes the “final” mortgage terms and details.

These forms streamline and simplify the complex mortgage process, as they are designed to be easier understood by the layperson. Read general information from the CFPB on the new forms here: Know Before You Owe. MLOs can review the compliance guide: TILA-RESPA Integrated Disclosure Rule, Small entity compliance guide.