Know Before You Owe: What do upcoming changes mean for you?

house with key

If you’ve ever been to a mortgage loan closing, you probably couldn’t help but notice the rather large stack of paperwork that has to be completed. Ideally, your mortgage lender was there with you to walk you through the process.  Each of the forms and disclosures included in that stack serves a purpose, helping to protect both parties’ interests and ensure fairness. While each item is important, the sheer bulk combined with industry jargon became overwhelming and confusing.

In order to simplify the process and help make sure people were better able to understand their loans, the Consumer Financial Protection Bureau enacted the TILA-RESPA Integrated Disclosure Rule – commonly referred to as Know Before You Owe – in May 2011. Last October, the CFPB proposed updates to this rule designed to make it easier for lenders to comply without inconveniencing consumers, and to make changes to the Loan Estimate form.

Originally, these updates were proposed to be effective on August 1, 2015.  As of June 17, 2015, the proposal was amended to be effective October 1, 2015, in order to allow time to correct an administrative error and to avoid having the transition coincide with a time when so many people are transitioning to new homes before the start of a new school year.

What does this mean for you? While the changes are intended to continually make the process easier to understand, walking through the transitions can be challenging. Now, more than ever, it’s important to have a trusted advisor by your side. If you are considering a move or refinance and would like to discuss how these changes will impact you, I’m here to help. Email or call me and I will be happy to help you understand the implications.

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