VHDA Explains the Changes in Homebuying

Don't fret.

The Consumer Financial Protection Bureau (CFPB) has recently set out to improve consumer financial laws, which will ultimately change the way homebuying disclosures are presented. These new processes and docs have been put in place to simplify the homebuying process. See below for the Virginia Housing and Development Authority's  5-point synopsis on the the changes to the homebuying process.  

1. The

         GoodFaith Estimate is no more. This has been replaced by the Loan Estimate, a          disclosure that helps consumers understand the key features, cost and risks of a mortgage loan.

1. Also gone is the Truth in Lending Disclosure. Now homebuyers receive an updatedLoan Estimate and a Closing Disclosure, which helps them understand all of the cost of the purchase transaction.
2. There are significant new laws in place to help protect consumers from predatory lenders. They include the Homeowners Equity Protection Act (HOEPA) and the TILA-RESPA Integrated Disclosure (TRID), which integrates previous consumer disclosures.
3. There are new time limits in place, as well. Pay close attention to the distinctions in these limits. The Loan Estimate must be provided to consumers no later than three business days after the loan application is submitted. In this case, a business day is any day that the lender’s offices are open to the public. The Closing Disclosure must be provided to the consumer three business days before they close on the loan. In this case, a business day is any calendar day except Sunday and legal public holidays.
4. One more document to know about is the Written List of Providers. This is a list of providers for a variety of services that homebuyers may shop for. It provides the type of service, estimated cost and contact information for the provider. Homebuyers are not required to use a provider from the list.

  If you applied for a mortgage before these changes took effect, you will still use the current documents, including the Good Faith Estimate, Truth In Lending Disclosure and HUD-1 Settlement Statement throughout the loan process and loan closing, even if it extends past the date of the change. But if you applied  for the mortgage starting on the day the changes took effect, or after, you will use the new documents. Questions? Feel free to give Dragas Mortgage Company a call to get information on what to expect from your homebuying experience.