You can read all about it here >>>http://www.consumerfinance.gov/knowbeforeyouowe/#disclosure <<<<
The new forms contain the same information as before but are easier to read by the consumer.
Specifically, Sections 1098 and 1100A of the Dodd-Frank Act require that the CFPB to publish rules that describe disclosures in connection with applying for and closing on a mortgage loan under the Truth in Lending Act and the Real Estate Settlement Procedures Act.[i]
For years this information was described in disclosures called the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA). The information on these forms is overlapping and the language is inconsistent. Naturally, consumers found these forms confusing.
Section 1032(f) of the Dodd-Frank Act mandated that the Bureau propose for public comment rules and model disclosures that integrate the TILA and RESPA disclosures by July 21, 2012. [ii]The Bureau satisfied this statutory mandate and issued a proposed rule and forms on July 9, 2012 (the TILA-RESPA Proposal or the proposal)[iii]. To accomplish this, the Bureau engaged in extensive consumer and industry research, analysis of public comment, and public outreach.
Things to know:
1. The Loan Estimate will be provided to consumers within three business days after they submit a loan application.
2. The second form (the Closing Disclosure) is designed to provide disclosures that will be helpful to consumers in understanding all of the costs of the transaction. This form will be provided to consumers three business days before they close on the loan.
3. Exceptions: It does not apply to home equity lines of credit, reverse mortgages, or mortgages secured by a mobile home or by a dwelling that is not attached to real property (in other words, land)
4. The Loan Estimate Form replaces two other forms: the Good Faith Estimate and the Truth In Lending Form.
a. Limitation on Fees. You cannot be charged any additional fees after agreeing to proceed with the transaction based on the Loan Estimate.
5. The Closing Disclosure replaces the HUD-1 and the Truth-In-Lending disclosure. It also replaces the revised Truth-In-Lending disclosure. It also contains additional disclosures as required by Dodd-Frank.
a. Timing. The creditor must give consumers the Closing Disclosure form to consumers so that they receive it at least three business days before the consumer closes on the loan.
Note: If the creditor makes certain significant changes between the time the Closing Disclosure form is given and the closing – specifically, if the creditor makes changes to the APR above 1/8 of a percent for most loans (and 1/4 of a percent for loans with irregular payments or periods), changes the loan product, or adds a prepayment penalty to the loan – the consumer must be provided a new form and an additional three-business-day waiting period after receipt of the new form. Less significant changes can be disclosed on a revised Closing Disclosure form provided to the consumer at or before closing, without delaying the closing.
[i] Dodd-Frank Act sections 1098 & 1100A, codified at 12 U.S.C. 2603(a) & 15 U.S.C. 1604(b), respectively.
[ii] 12 U.S.C. 5532(f).
[iii] 3 See Press release, U.S. Bureau of Consumer Fin. Prot., Consumer Financial Protection Bureau proposes “Know Before You Owe” mortgage forms (July 9, 2012), available at <<LINK>>