You may have heard the Consumer Finance Protection Bureau (CFPB) has made new rules regulating the mortgage industry. No one, including the CFPB, is quite sure when the new rules will take effect, but the industry has been assured that it will be in 2014.
One of the most noticeable changes that real estate agents, loan officers and buyers and sellers will see is a new form. The good old Housing and Urban Development Form-1, known to most as the “HUD-1” or Settlement Statement is going the way of the dodo bird.
The form to replace the HUD-1 is “The Closing Disclosure” and it does not look at all like the settlement statement you may know. Getting to familiar with this form may take some time, but the form essentially serves the same purpose and provides the same information as the HUD-1.
According to the CFPB the new Closing Disclosure is designed to be more consumer friendly and easy to understand. Lenders are not allowed to use the new form, and it is not likely that they are prepared to use the new form even if they wanted to. The form is currently in the “Proposed” stage and the use of it is expected to be mandated mid-to-late 2014.
You can see a copy of the proposed form from our website here.