What About the HUD?

September 9, 2015

Financial Industry Compliance Lender Challenges


As you know, on June 24th, the following release was issued by the Consumer Financial Protection Bureau (CFPB) in regards to the implementation date of the new Closing Disclosures:

CFPB Proposes Two-Month Extension of Know Before You Owe Mortgage Rule

WASHINGTON, D.C. – The Consumer Financial Protection Bureau (CFPB) today issued a proposed amendment to the Know Before You Owe mortgage disclosure rule, which proposes to move the rule’s effective date to October 3, 2015. The rule, also called the TILA-RESPA Integrated Disclosure rule, requires easier-to-use mortgage disclosure forms that clearly lay out the terms of a mortgage for a homebuyer. The Bureau is issuing the proposal to correct an administrative error that would have delayed the effective date of the rule by at least two weeks, until August 15 at the earliest.

The CFPB is proposing a new effective date of Saturday, October 3. The Bureau believes that moving the effective date may benefit both industry and consumers with a smoother transition to the new rules. The Bureau further believes that scheduling the effective date on a Saturday may facilitate implementation by giving industry time over the weekend to launch new systems configurations and to test systems. A Saturday launch is also consistent with existing industry plans tied to the original effective date of Saturday, August 1.

As we all look toward the changes that the CFPB has in store for October in regards to the new TRID (TILA-RESPA Integrated Disclosures), one of the things we have heard from our customers is:

“What about your realtor and attorney partners who want to see a HUD?”

One of the ways that lenders are dealing with this is to issue a Closing Statement of sorts in lieu of the HUD which highlights the items due to and from the buyer and seller at closing. Here are two examples of such a statement: Statement 1 | Statement 2. While this is just a guide to develop your own statement, the version here does include a proration to account for 365 or 366 day years. It will be important for your institution to determine if this is appropriate in light of the changes to the disclosures and we offer this just as a sample.

There are certainly many resources to help navigate through the changes ahead. Of all of these, we still find the most valuable to be the CFPB’s website, which has comprehensive resources including timelines and videos.