Big changes coming to the Real Estate Settlement Procedures Act
May 6, 2015
COLUMBIA, SC – South Carolina REALTORS® (SCR) is alerting its members and the public of the new Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) changes which will take effect August 1, 2015. The changes will significantly change the closing process.
On November 20, 2013, the Consumer Financial Protection Bureau (CFPB) issued its final rule to integrate RESPA and TILA disclosures and regulations. The final rule integrates existing disclosures with new requirements from the Dodd-Frank Act to improve consumer understanding of the mortgage process, aid in comparison shopping and help to prevent surprises at the closing table.
Highlights of the new rule include:
- A new loan estimate document which replaces the Good Faith Estimate and the initial Truth in Lending disclosure.
- A new closing disclosure document which replaces and combines the HUD-1 and final Truth in Lending disclosures.
- Loan Estimates must now be given to consumers within 3 business days of applying for the loan.
- Types of loans covered include most closed-end consumer mortgage loans. The rule does not apply to Home equity lines of credit, reverse mortgages, mortgages secured by mobile homes or by dwellings not attached to the property and creditors who make five or fewer mortgage loans in one year.
SCR suggests those who intend to buy or sell real estate after July should contact their law firm as soon as possible to discuss how the new federal laws, closing procedures and documents could potentially cause closing delays.
“It’s crucial that Realtors® and consumers understand these new procedures so that there are no surprises at the closing table,” said SCR CEO Nick Kremydas.
SCR and the National Association of REALTORS® (NAR) are offering Realtor® members numerous opportunities to learn about the new rules including online webinars and forums at its Midyear Meetings in Washington DC next week.
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About South Carolina REALTORS® (SCR)
South Carolina REALTORS® (SCR), the largest professional trade association in the state, serves as the voice of real estate for 16,000 members involved in all aspects of the residential and commercial real estate industries. REALTOR® is a registered trademark that identifies a professional in real estate who subscribes to a strict code of ethics as a member of SCR and the National Association of REALTORS®.
