New CFPB Closing Forms Might Need To Be Filed Earlier
The changes to real estate closing forms that are coming up August 1, 2015 will have farther reaching implications than simply filling in different boxes on a piece of paper. You may have to change some of your work flows to accommodate changes in the law. Easy HUD settlement statement software can help you stay on track.
The new system laid out by the Consumer Financial Protection Bureau (CFPB) specifies two forms that must be provided to consumers as part of the real estate process. The Loan Estimate replaces the early Truth in Lending statement and Good Faith Estimate, and must be provided within three business days of filing a loan application. The Closing Disclosure replaces the final Truth in Lending Statement and the HUD 1 settlement sheet, and must be provided three business days before closing a loan.
Note that the new rules specify “business days”. A business day is defined by the rules as any day other than Sunday or federal holidays.
How do you ensure the consumer receives the form three days before closing? Ideally you hand deliver it and get a receipt to show proof of delivery. However you are a busy professional and you may think that email is good enough, right? Well, maybe.
If you deliver the Closing Disclosure by postal mail or email, then you need to allow another three days for delivery. Make sure you understand that: you need to provide three days for delivery even for email. That means your lead time is now six days before closing: the original three-day requirement plus a three-day delivery time.
A six-day lead time guarantees you will have to account for Sundays and that means adding a day for a seven-day lead time. No matter what weekday you close on, if you count six days back that will include a Sunday somewhere so you have to give an extra day. If you happen to cross a federal holiday then you add one more day, and now you have an eight-day lead time.
Rather than trying to count out days each time, it’s probably going to be best to simply always send the form out eight days before closing. By using the worst case scenario, you don’t have to worry about getting in trouble because you forgot about Labor Day or Presidents’ Day.
These are the kinds of modifications to your workflow you should be thinking about now, even though the changes are months away. Make the changes now so you can smoothly transition to the new forms once the HUD settlement statement goes away and Easy Soft updates Easy HUD with the new CFPB forms.