Our industry is in for yet another major change, for all loans originated after August 1, 2015. These new CFPB (Consumer Financial Protection Bureau) rules will affect everyone in our industry from mortgage brokers, lender, title agents and even realtors. We all must be ready to conform to these new changes and to be ready to properly educate our buyers and sellers.
Our office will attend a seminar in May to learn more about these changes. At this point, we have been doing research and learning from our underwriters. Even the industry gurus are still unsure exactly what all the changes will be. The CFPB’s guidelines were over 1,000 pages long and the state of Florida title leaders are still trying to digest all this information and determine its effects for Florida. Here are a few things we wanted to pass on to our realtor friends for now, with more information coming as we learn more.
1. Add 15 days at least to contracts.
- The lender has waiting periods when they deliver the Loan Estimate and then the Closing Disclosures (what we know as now as the HUD). After the Closing Disclosures has been delivered NO changes can be made to the fees or the time frame will start again.
- This time frame may want to be increased for the first few months that everyone is learning and dealing with these changes.
2. No more solving problems at closing.
- Our underwriters are even suggesting the walk through take place a few days early, if possible. As mentioned above there can be no changes to the Closing Disclosure once issued.
- Buyer, Sellers and realtors will have to work together early on to make sure problematic issues are taken care of, at least, about a week before the scheduled closing.
- Last minute credits will not be allowed.
3. No moving up closing dates.
- Since the forms are time sensitive there will be little to no flexibility in moving closing dates up.
- Make sure contracts after August 1, 2015 reflect this time frame.
4. Check with the local NEFAR or realtor associations to see if there will be any seminars or teachings for realtors.
- Realtors will need to learn the new forms, Loan Estimate, then the Closing Disclosures, and the new terminology – did you know closings will now be called “consummation”! – so that we can help our clients.
- Our title underwriters have told us that the major realtor associations are trying to get seminars or lectures together.
- If you can not find any of these please let us know. Our underwriters and we can do a presentation to you or your firm to help guide you through these changes.
It is the realtors, title agents and lenders who will be in charge of educating our clients. Since so often realtors are the first contact it is imperative that realtors know how these new rules will affect the closings.
The second half of the year will be a time of major change. However, the more we are educated and prepared the easier it will be on all of us. This will in turn make it easier on our mutual clients.
Please reach out of us if you would like to learn more.