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Closing a Mortgage? What Consumers Can Expect From New Disclosure Forms

picture of a sold sign in front of a house

The Consumer Financial Protection Bureau (CFPB) recently created new integrated mortgage disclosure forms in response to consumer concern that the process of buying a home is often overwhelming and complex.

The new forms are part of the CFPB’s “Know Before You Owe” initiative, an effort to help consumers better understand the mortgage process. Four forms are now streamlined into two forms, the Loan Estimate and Closing Disclosure. The Closing Disclosure combines and replaces the HUD-1 Settlement Statement and the final Truth-in-Lending (TIL) statement for most mortgages. The two new disclosures are intended to show the consumer all the costs and terms of a mortgage.

Lenders are required to provide the Closing Disclosure three business days before a scheduled closing.  These three days can be used to double-check the details of a loan.  This is the time to question anything that looks different or changed from the original agreement.  If something looks different, ask why.  This is the time to resolve problems.  

For a guide on reading and understanding the new disclosures, follow this link.

The Consumer Financial Protection Bureau was created under Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The CFPB is an independent agency within the Board of Governors of the Federal Reserve System.  The CFPB oversees the products and services offered under federal consumer financial laws. www.consumerfinance.gov.