Take Steps Now, Before Aug. 1 Mortgage Rule Change

It’s a whole new world for mortgage lending.

by: Theresa Reinke

The TILA/RESPA Integrated Disclosure rule is the biggest mortgage lending regulatory change we have seen in recent memory. This rule will directly affect the people, processes and technology credit unions use to support both first and closed-end home equity mortgage lending. It will impact relationships with system providers and, most importantly, credit union members and staff.

As the August 1, 2015, effective date draws closer, implementation of these game-changing requirements will be the key to success. Determine now who is on your team and how your third-party partners can help. Remember there is no grandfather clause to this Integrated Disclosure rule–on August 1, the new rules must be implemented.

To make matters more complicated, all loans initiated before August 1 will require the existing TIL disclosures and RESPA Good Faith Estimate and HUD-1/1A Settlement Statements. Thus, credit unions will be running dual systems for a while.

The new Loan Estimate and Closing Disclosure are not merely replacing or combining the existing disclosures. There are many new data elements, calculations and quite a few new restrictions. And the documents will have dynamic elements based on loan type, loan feature and loan purpose. Taking everything into consideration, there could be thousands of permutations of the disclosures. Yes, the face of mortgage lending has changed as we know it.

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